The national household debt has increased by 3.6%, compared to the first quarter, to about 16.07 trillion baht in the second quarter of this year, representing 90.7% of GDP, according to the National Economic and Social Development Board.

The board said that credits of all kinds increased in the second quarter, mostly from real estate purchases and personal consumption.

Household debt poses a major challenge for all governments and, despite their efforts to address the problem, it tends to increase, resulting in about 370 billion baht in non-performing loans during the COVID-19 pandemic in the second quarter of this year, a 22% increase from the previous quarter and requiring debt refinancing.

The board said that debt moratorium programs, implemented by previous governments to address farmers’ debt problems, through the Bank of Agriculture and Agricultural Cooperatives, have failed, because most of the debtors created new debt because their earnings were insufficient to invest in new crop cultivation.

Members of cooperatives are also heavily in debt, among them are teachers, civil servants, police officers and even students, who rely on loans to further their studies, said the NESDC.

Citing the government’s attempt to address the informal debt problem, one important element, on which the government must focus, is to prevent debtors turning to informal borrowing again, otherwise any efforts to address the problem would be in vain.