Household debt in Thailand has climbed to an average of 559,408 baht per household, an increase of 11% compared to last year, due to slow economic recovery, the COVID19 pandemic, political conflict and geopolitical issues.

The Bank of Thailand is implementing measures to tackle the debt problem, adding that there is an urgent need for financial education and plans to manage expenditure in the long term. Given that household debt accounts for 90% of Thailand’s GDP, the forecast for next year’s GDP indicates a positive economic outlook.

The setback in forming a government, however, has been identified as an obstacle to economic policy implementation, leading both domestic and foreign investors to postpone their investments until a clearer picture of Thailand’s politics emerges. The delay is also affecting the budget structure for fiscal 2024, hindering the government’s ability to stimulate the economy with the more than 700 billion baht budget in the first quarter of 2024.

If the government formation is postponed until after this August, budget allocations might be halted until the third quarter of 2024, which could have immense impacts on the economy this year and potentially affect economic stimulation at the beginning of next year. The GDP growth for this year is projected to lie in the range of 3% to 3.5% and it could reach 3.5% to 4% in 2024, assuming the government is formed between August and September.