[BANGKOK] Thailand’s average household debt is expected to surge at the fastest pace in five years as a weakening economy and rising cost of living force citizens to turn to informal lenders, a survey showed.
The debt pile per household is expected to jump by 22 per cent this year to a record 740,597 baht (S$29,687.88), the University of Thai Chamber of Commerce said, citing the result of a Sep 15-to-Sep 22 survey of 1,716 respondents. That is the highest debt value since the university started conducting the survey in 2009, while the pace of increase will be the fastest since 2020 when it rose by 42 per cent.
The nation has suffered from the highest household liabilities in the past decade. Prime Minister Anutin Charnvirakul’s new government, which will deliver its policy statement next week, has planned measures to help individuals and small businesses manage debt, while boosting spending to support consumption.
The share of respondents borrowing from informal sources jumped to 15.4 per cent this year from 0.3 per cent in 2024, according to the survey. Those with only formal debt fell to 50.9 per cent from 59.9 per cent, while the rest have both.
Total household debt stood at 87.4 per cent of gross domestic product in the first quarter, easing from 88.4 per cent at the end of 2024 as tighter bank lending and economic growth helped trim the ratio.
“Banks are reluctant to lend amid the weak economy, pushing more people to loan sharks,” Thanavath Phonvichai, the university’s president, said in a briefing on Thursday (Sep 25).
Thai commercial banks’ outstanding loans shrank for a fourth straight quarter in the April to June period, as a slowing economy tempered credit to consumers and small businesses. BLOOMBERG
