According to the latest Bank of Thailand data in 3Q20, Thailand’s loans to households or household debt remains high and continues to trend upwards, bucking the signs of a weakening economy. Outstanding household debt has reached 86.6% of the GDP, an 18-year high. KResearch found signs of accelerating new household debt in 3Q20, particularly housing loans and other large debts such as business loans, car loans and consumption debts (such as credit card and personal loans).
KResearch estimates that Thailand’s household debt ratio is likely to exceed 90% of the GDP at the end of 2020, and is expected to accelerate further. Household debt in Thailand could rise to 91.0% of the GDP or even higher in 2021, if the economy is affected by the COVID-19 pandemic more than estimated and leads to a 2021 GDP growth rate below the base case of 2.6%. The persistently high level of household debt is one indicator that highlights the structural problems of the Thai economy, while the vulnerability of the household financial status is another challenge to be addressed after the COVID-19 pandemic has been contained and the Thai economy has returned to normal. Meanwhile, the more pressing issue is to develop financial assistance measures for debtors, including businesses and households, to enable them to weather the current difficult period.
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