Accra:The country is grappling with significant economic challenges as both national and household debt levels rise. Thailand's public debt currently stands at approximately 67-68% of GDP, approaching the 70% ceiling, which poses a constraint on financial management.
According to Thai News Agency, the Director of the SME Financial Advisory Center, Surachai Kamplanonwattana, emphasizes the importance of how borrowed funds are utilized. If the funds are directed towards income generation, economic restructuring, or productivity-enhancing projects, the debt is more manageable. Conversely, if the funds are used for one-off expenses, future challenges are inevitable due to rising global interest rates increasing financing costs.
Household debt in Thailand has reached 86% of GDP, largely driven by consumer spending rather than investments. This includes personal loans and installment purchases through online platforms, which are particularly accessible to younger generations. This trend is weakening the purchasing power of the economy, as most income is allocated towards debt repayment. Consequently, SME business loans have contracted for several quarters.
Mr. Surachai advocates for solutions beyond merely injecting money into the economy. He suggests systematically accelerating national income creation by supporting new investments that add real value, providing funding access to SMEs, and revitalizing soft power strategies. By effectively managing these opportunities, Thailand could attract foreign investment, reducing reliance on debt as the sole economic driver.
To address the debt issue sustainably, a shift from borrowing to generating income and strengthening local economies is essential. All sectors need to collaborate to overcome this challenge by ensuring there is adequate income to manage financial obligations.