As the Thailand economy continues to worsen, and as the country remains locked off from most international tourists, the Bank of Thailand (BoT) has released data showing Thailand’s household debt ratio to GDP rose to 90.5% in the first quarter.
This is the highest since 2003, and a good indicator the economy will continue to worsen as people get further into debt, and are thus unable to afford anything other than the basic necessities.
Thailand’s household debt ratio in 2021 is also a good indicator government Covid-19 restrictions are continuing to damage the economy and, with more severe restrictions now in place as Covid cases rise in the beleaguered South East Asian country, the household debt ratio is likely to rise even further.
The amount of household debt in Thailand in 2021 is now one of Asia’s highest.
A World Bank study discovered if the debt-to-GDP ratio of a country exceeds 77% for an extended period of time, it slows economic growth.
This also does not bode well for Thailand as a whole, as a country’s household debt signals its ability to pay back its debts. The higher the household debt, the more likely a country will renege on payments.
Compare Thailand’s household debt in March, 2021 to the United States’ 69.5% in the same period, and it is easy to see which country is likely to see economic growth and which will not.
