Thailand is drowning in household debt. The new prime minister wants to change that

An estimated US$475 billion of debt is driving inequality, the government says – as Thailand’s economic growth lags behind its neighbours

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A worker repairs the window of an apartment in Bangkok. Thailand’s development is concentrated mainly in the capital and other major cities. Photo: AFP

Published: 10:32am, 9 Sep 2024Updated: 10:34am, 9 Sep 2024

Thailand’s new government plans to expedite a sweeping debt restructuring to tackle an estimated US$475 billion of household liability, offer financial assistance to small businesses and accelerate fiscal stimulus to lift growth.

The debt revamp will cover the entire system, and will be especially targeted at providing relief to borrowers of car and home loans, according to a draft policy statement. Prime Minister Paetongtarn Shinawatra is due to announce the plans in parliament on Thursday.

The initiative will also cover the informal sector, and will be implemented through state-owned financial institutions, commercial banks and asset management companies.

The government is concerned about household debt that’s at more than 16 trillion baht (US$475 billion) – equivalent to over 90 per cent of gross domestic product – and rising non-performing loans, Paetongtarn is set to say.

The indebtedness is driving inequality between the rich and poor, with development concentrated mainly in Bangkok and major cities, the prime minister will say.

Paetongtarn Shinawatra is the third member of her influential family to lead Thailand. Photo: Reuters

The policy statement will list out priorities of Paetongtarn’s coalition government that’s led by her Pheu Thai Party and backed by a clutch of pro-establishment and royalist groups.