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Thai Household Debt Soars to Record 83.3% of GDP, Fueled by Covid-19 Crisis

THailand Credit Cards Household Debt

Household debt has soared to its highest level ever, equal to 83.8 percent of Thailand’s gross domestic product due to the novel coronavirus, a staggering figure that may force the central bank to introduce more fiscal-stimulus measures.

Bank of Thailand Gov. Sethaput Suthiwartnarueput said debt increased for a. third of Thai people, which is slowing consumption and economic growth.

Thais became quickly indebted and have remained so for a long time, he said.

According to the BoT governor, household debt totaled 13.6 trillion baht in the second quarter of this year, up from 13.5 trillion baht, or 80 percent of GDP, at the end of last year, the previous record.

Even in 1997-1998, household debt levels never passed 55 percent of GDP.

“Covid-19 further weakened the financial status of Thai people due to their reduced working hours and layoffs. Household debt thus rose to 83.8 percent of GDP in the second quarter of 2020 and are rising,” Sethaput said.

The Bank of Thailand and financial institutions would work out assistance for debtors but it would not be across-the-board, he said.

The BoT governor expected the economy would return to its pre-Covid state in the third quarter of 2022. Before that, the central bank would introduce more monetary measures to stimulate the economy, he said.