The COVID-19 pandemic has caused a significant increase in household debt in Thailand, with the average household now over 500,000 baht in debt, the highest level in 15 years.
Key Takeaways
- The COVID-19 pandemic and economic downturn have led to a significant increase in household debt in Thailand, reaching its highest level in 15 years.
- Many Thais have resorted to borrowing to meet daily expenses, with Gen Y and Gen Z individuals using money in advance without proper planning, exacerbating the debt situation.
- The Thai economy’s recovery is hampered by a global economic slowdown, unequal growth in different sectors, and delays in the formation of a new government, leading to increased economic pressure and uncertainty for households.
The University of the Thai Chamber of Commerce conducted a survey revealing that household debt has been rising and has worsened due to the pandemic’s impact on the economy and employment.
Household debts have grown by 11.5% this year, and a Thai household is now 559,408 baht in debt, on average. 80.2% of the debt amount may be attributed to formal lending, and 19.8% involves informal lending, according to a NNT report.
Many people have resorted to borrowing to make ends meet, leading to a growth of 11.5% in household debt this year. The situation is expected to peak next year as economic conditions remain uncertain.
However, it is believed that the debt level will drop within five years as the overall economic picture improves. Measures such as low-interest loan sources, debt management education, and stricter borrowing criteria are suggested to address the issue.
