BANGKOK— Thailand is facing a sobering economic reality as new data reveals that more families are borrowing money not to buy homes or cars, but simply to keep food on the table. According to the latest report from the SCB Economic Intelligence Center (SCB EIC) , Thailand’s household debt has climbed to a staggering 86.7% of the nation’s Gross Domestic Product (GDP).
As of the fourth quarter of 2025, total household debt reached 12.72 trillion baht, an increase of 119 billion baht from the previous quarter. This shift marks a concerning trend where credit is no longer a tool for growth but a lifeline for daily survival.
For years, commercial banks were the primary source of credit for Thais. However, that is changing quickly. As the economy remains fragile and the labor market struggles, big banks have tightened their belts. Lending from commercial banks has dropped for seven consecutive quarters.
With traditional banks saying “no,” struggling families are turning to alternative sources. This includes:
- State-owned financial institutions:These are expanding credit in line with government measures.
- Savings cooperatives:Many workers are borrowing against their future stability.
- Pawnshops:There has been a significant surge in people pawning personal items to secure quick cash for immediate needs.
This “borrowing shift” highlights a widening gap between income and the rising cost of living. When the paycheck doesn’t cover the grocery bill, the pawnshop becomes the only option.
Why Are Thais Struggling to Pay the Bills?
Several “perfect storm” factors are driving this debt crisis. While the country has technically moved past the pandemic, the recovery has been uneven.
- Inflation and Energy Costs:Geopolitical tensions in the Middle East have pushed energy prices higher. This doesn’t just affect the gas pump; it raises the price of everything from logistics to the food on your plate.
- Eroding Wages:The SCB EIC forecasts inflation to hit 3.2% in 2026. This means that even if people are working, their “real wages”—what their money can actually buy—are shrinking.
- A Fragile Job Market:While the service sector (like tourism) is growing, other sectors like manufacturing and rice cultivation are hurting. Workers are shifting jobs frequently, leading to income instability.
The debt crisis isn’t hitting everyone equally. Small and medium-sized enterprises (SMEs) are feeling the squeeze of high oil prices, which eat into their profits and limit their ability to raise wages for employees.
The SCB EIC suggests that the government must look beyond short-term fixes. While easing the immediate cost of living is necessary, the country needs structural changes to address why income is failing to keep pace with debt. Without a significant boost in productivity and wage growth, the cycle of borrowing for daily consumption is unlikely to break.
Summary of Key Findings
- Record Debt:Household debt is now 86.7% of GDP.
- Daily Spending:Most new debt is being used for personal consumption rather than long-term assets.
- New Lenders:People are moving away from commercial banks toward pawnshops and cooperatives.
- Future Risks:Rising inflation and high energy costs are expected to keep the pressure on Thai households throughout 2026.
As Thailand navigates this period of economic fragility, the focus remains on whether the “Land of Smiles” can find a way to turn the tide on a debt mountain that shows no signs of shrinking.
