The country’s household ratio eased to 86.8% of gross domestic product in the third quarter from 88.1% in the previous quarter, the Bank of Thailand said on Friday, as the economy continued to recover.
The ratio is still among Asia’s highest, however, and the amount of debt increased to 14.9 trillion baht at the end of September from 14.76 trillion at the end of June.
The high level of household debt could disrupt the economic recovery and needed to be brought down to sustainable levels, Governor Sethaput Suthiwartnarueput said earlier this month.
The high debt was one reason why the central bank has not increased interest rates aggressively while the economic recovery was slow and had yet to return to the pre-Covid period, Mr Sethaput said.
The BoT has raised its key rate by a total of 75 basis points since August to 1.25% to curb inflation and ensure the recovery continues. It will next review its policy rate on Jan 25, when most economists expect a further gradual increase.
Growth in Southeast Asia’s second-largest economy has lagged behind peers as the country’s vital tourism sector has just started to rebound in the second half of this year.
The central bank has forecast growth of 3.2% this year and 3.7% in 2023. Last year’s growth rate of 1.5% was among the slowest in the region.