Thai central bank aims to cut household debt to 80% of GDP

The Bank of Thailand (BoT) is considering four measures to reduce Thailand’s household debt to about 80% of gross domestic product (GDP), down from the current 90.7%, according to Ronadol Numnonda, deputy governor for financial institution stability at the BoT.

He attributed the increase in public debt to a series of crises in the last couple of years, including the COVID-19 pandemic, which have plunged many people and businesses into deeper indebtedness.

He said that the first measure, to be introduced in January, is responsible lending, under which financial institutions must be cautious and more responsible in extending loans, taking into account the existing household debt of the borrower.

The next problem to be addressed is chronic indebtedness, meaning that the debtors are only capable of repaying the interest and not the principal, meaning that they are unable to settle…