The slowing economy has triggered a surge in household debt of 7.4% this year, says the University of the Thai Chamber of Commerce (UTCC).
The university's latest survey of 1,201 respondents during Nov 11-23 found that household debt averaged 340,053 baht per household, compared with a year-earlier 316,623 baht, which was up 5.8% from November 2017.
"This is particularly fuelled by the domestic economic slowdown, which is affected by the prolonged trade war, lower exports and tourism," said Thanavath Phonvichai, vice-president for research at the UTCC. "Even worse is that farm prices remain relatively low as expenses increase."
The survey found that household debt stems from borrowing for general spending, car and housing loans, credit card charges and existing debt repayments.
Some 59.2% of the debt is formal debt borrowed from financial institutions, and 40.8% is underground debt owed to loan sharks.
Mr Thanavath said Thailand's household debt has increased every year, but the ratio to GDP remains below 80%.
"Most debts are incurred for necessary items such as car purchases and housing loans," he said. "The rate now of 78% to GDP is not yet regarded as worrisome."
The university forecasts that the economy will grow by 2.5-2.6% this year, falling below 3% for the first time in five years.
The slowing economy has curbed people's income, prompting them to rely more on loans for daily spending, Mr Thanavath said.
"The government should come up with more stimulus measures to accelerate recovery by the middle of the first quarter next year," he said. "If the economic recovery fails to manifest by then, a surge in household debt is anticipated next year."
Mr Thanavath also urged the government to come up with more effective means to manage living costs to rev up confidence among consumers and investors, such as providing soft loans and easier access to loans for those in need.