Thailand’s Household Debt Crisis Emerges as Drag on Growth Recovery
Elevated borrowing levels nearing 90% of GDP weigh on consumption and investment, posing a threat to economic momentum
Thailand’s household debt has climbed to historically high levels, with the ratio of debt to gross domestic product passing 88 % and nearing 90 %, according to recent data.
This mounting burden is acting as a brake on the nation’s post-pandemic recovery, restraining both consumer spending and investment.
The International Monetary Fund (IMF) highlighted that Thailand’s household debt peaked at roughly 95 % of GDP in early 2021 and remains elevated at approximately 89 % this year, a level far above the threshold where debt begins to impair growth.
Many households now allocate a growing share of income to servicing loans rather than consumption or savings—eroding one of the key engines of the country’s economy.
The nature of the debt is also sharply raising concerns: a large portion of new loans has gone towards non-income-generating purposes such as personal consumption, auto purchases and short-term borrowing rather than investment in homes or businesses.
One study found that up to seven in ten households borrow for living-costs rather than wealth-creating assets.
The risks embedded in the debt picture extend beyond individual households.
The Bank of Thailand has flagged the high debt service ratio—22.3 % for Thai households—above the region’s major-economy average of 9.8 %.
Moreover, non-performing loans in credit-card and consumer segments have increased, while the share of loans in “special-mention” status is rising.
For Thailand, the implications are clear: sluggish growth prospects, subdued private investment and a potential hit to financial stability.
The IMF cautions that unless new borrowing is curbed and the existing debt stock reduced, Thailand will struggle to generate sustained growth above 3 % in coming years.
On the policy front, the government has taken steps including soft-loan programmes for low-income borrowers, a baht ten-billion (US$307 million) bad-debt-purchase scheme launched in October 2025 and relaxed home-loan rules to reinvigorate the property sector.
Yet analysts say these measures may only address symptoms rather than the root causes of the debt drag.
Without stronger wage growth, enhanced productivity and structural reforms to diversify financing channels and repair household balance-sheets, Thailand’s household debt burden will remain a long-term constraint on the economy’s recovery trajectory.
This mounting burden is acting as a brake on the nation’s post-pandemic recovery, restraining both consumer spending and investment.
The International Monetary Fund (IMF) highlighted that Thailand’s household debt peaked at roughly 95 % of GDP in early 2021 and remains elevated at approximately 89 % this year, a level far above the threshold where debt begins to impair growth.
Many households now allocate a growing share of income to servicing loans rather than consumption or savings—eroding one of the key engines of the country’s economy.
The nature of the debt is also sharply raising concerns: a large portion of new loans has gone towards non-income-generating purposes such as personal consumption, auto purchases and short-term borrowing rather than investment in homes or businesses.
One study found that up to seven in ten households borrow for living-costs rather than wealth-creating assets.
The risks embedded in the debt picture extend beyond individual households.
The Bank of Thailand has flagged the high debt service ratio—22.3 % for Thai households—above the region’s major-economy average of 9.8 %.
Moreover, non-performing loans in credit-card and consumer segments have increased, while the share of loans in “special-mention” status is rising.
For Thailand, the implications are clear: sluggish growth prospects, subdued private investment and a potential hit to financial stability.
The IMF cautions that unless new borrowing is curbed and the existing debt stock reduced, Thailand will struggle to generate sustained growth above 3 % in coming years.
On the policy front, the government has taken steps including soft-loan programmes for low-income borrowers, a baht ten-billion (US$307 million) bad-debt-purchase scheme launched in October 2025 and relaxed home-loan rules to reinvigorate the property sector.
Yet analysts say these measures may only address symptoms rather than the root causes of the debt drag.
Without stronger wage growth, enhanced productivity and structural reforms to diversify financing channels and repair household balance-sheets, Thailand’s household debt burden will remain a long-term constraint on the economy’s recovery trajectory.
