Thailand intensifies efforts to tackle household debt

The Bank of Thailand (BOT) is implementing additional measures to facilitate debt restructuring, targeting a reduction in the nation’s $454 billion household debt, Bloomberg reported on Wednesday.
The BOT will perform surprise inspections on banks to ensure they provide viable debt solutions and will penalise non-compliance. A new restructuring initiative starting April 1 will allow borrowers to settle persistent debts over five years with a maximum interest rate of 15 per cent.
Thailand’s household debt, one of the highest in Asia, reached a peak of 96 per cent of GDP in 2021 and has since decreased to approximately 91 per cent, prompting Prime Minister Srettha Thavisin to take various actions to tackle this persistent issue.
Srettha urged the Bank of Thailand to reduce borrowing rates to alleviate the country’s debt issues, although the central bank has warned that this approach might actually aggravate the problem.