Thai govt targets high household debt with strategic measures for economic growth

He was speaking at the “What Will Thai People's Life Be Like in 2024?” seminar held on Monday at Bangkok’s Intercontinental Hotel.

The seminar was organised by the digital TV channel TOPNews.

In his speech, Krisada highlighted household debt, geopolitical tensions, global economic slowdown and insufficient public sector investment as challenges to Thailand’s economic growth.

He added that in response, the government is actively working to provide practical solutions for debt-related issues and implementing measures to boost consumption.

Prime Minister Srettha Thavisin, meanwhile, is set to unveil solutions to address the scourge of loan sharks on Tuesday as part of his government’s broader debt management strategy.

He is also scheduled to unveil more measures to address the debt problem on December 12.

The International Monetary Fund (IMF) has forecast Thailand’s growth at about 3% this year and slightly lower at 2.9% next year, falling short of the government’s 5% growth target.

The subdued growth is attributed to the slow recovery of major trading partners, including the US, China and Japan.

High household debt, coupled with inflation, has further dampened domestic consumption demand.

Hence, Krisada emphasised the need for short-term measures to stimulate demand, reduce debt and address living costs.

The government also aims to upskill and reskill the Thai workforce for long-term income stability. Currently, Thailand’s household debt stands at 90% of its GDP, impacting domestic consumption, savings and investment, contributing to a low growth rate over the past two decades.

Details of the government’s measures will be disclosed in January after extensive discussions with stakeholders, ensuring compliance with applicable laws and regulations.

Krisada and Phaophum Rojanasakul, secretary to the finance minister, both emphasised the importance of enhancing Thai workers’ skills to sustain high income.

The deputy finance minister pointed out that most Thais take loans because their income is insufficient to cover their expenses.

Phaophum, meanwhile, defended the government’s efforts to boost domestic consumption, saying short-term measures introduced to boost demand will spark growth.

He was referring to the 10,000-baht digital wallet handout, which critics say will only result in higher household debt.

The digital wallet should be implemented by May next year, Phaophum said.

Separately, Krisada said despite a cautious outlook for the Thai economy in 2024, the country is still strong financially, which allows for greater flexibility in some fiscal and budgetary policies.