BANGKOK (Reuters) -Thailand’s central bank on Wednesday said solutions for addressing the country’s high household debt problem must ensure good financial discipline while also supporting credit access for debtors.
The issue was complicated and needed cooperation from many parties to be solved, the Bank of Thailand said in a statement.
It was responding to a question on an idea proposed by Thailand’s influential former Prime Minister Thaksin Shinawatra to buy people’s debt from banks and clear their credit bureau records.
Thailand’s household debt stood at 16.34 trillion baht ($486 billion) at the end of September 2024, or equivalent to 89.0% of gross domestic product, among the highest levels in Asia.
The government, which is led by Thaksin’s daughter, Paetongtarn Shinawatra, has repeatedly said the debt was shackling the economy, Southeast Asia’s second-largest, which grew just 2.5% last year, lagging peers.
The central bank has forecast growth of slightly higher than 2.5% this year.
Tackling debt problems must be done directly and strengthen the stability of the whole financial system, considering the value of utilising the country’s resources and budget to generate the maximum benefits, the central bank said.
Measures should consider the causes of the problem, the principles of implementing the measures, and the potential side effects to create the most sustainable results for both debtors and the Thai economic system, the bank added.
($1 = 33.63 baht)
(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Martin Petty)
