High level of household debt could disrupt economic recovery

BANGKOK (NNT) – Thailand’s household debt to gross domestic product ratio dropped to 86.8% in the third quarter from 88.1% in the previous quarter, as the economy continued to recover.

Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput said earlier this month that the high level of household debt could disrupt the economic recovery and needed to be brought down to sustainable levels.

Thailand’s household debt to GDP ratio among Asia’s highest

The ratio was still among Asia’s highest, however, and the amount of debt increased to 14.9 trillion baht (US$431.51 billion) at the end of September from 14.76 trillion baht at the end of June.

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The high debt was cited as one reason the BOT has not increased interest rates aggressively while the economic recovery was slow.

The BOT has raised its key rate by a total 75 basis points since August to 1.25% to curb inflation and ensure the recovery continues. It will next review policy on January 25, when most economists expect a further gradual rate hike.

The BOT forecast growth of 3.2% this year and 3.7% in 2023. Last year’s growth of 1.5% was among the slowest in the region.