BANGKOK, Thailand – The Bank of Thailand (BOT) has expressed the need for careful consideration regarding the government’s proposal to buy out household debt, emphasizing that any approach must ensure financial discipline, preserve access to credit, and address structural economic challenges.
While discussions on the plan are ongoing, the central bank noted that details on the specific types of debt to be included remain unclear and require further study before implementation.
BOT highlighted that resolving household debt must not create incentives for reckless borrowing or undermine financial stability. The central bank stressed that debt relief programs should encourage responsible financial behavior rather than promoting expectations of regular government bailouts, which could lead to repeated defaults and systemic financial risks. It also warned that improperly designed initiatives could distort the ability of financial institutions to assess borrower creditworthiness, potentially leading to more restrictive lending practices and making credit less accessible in the long run.
Thailand’s household debt problem is deeply rooted in structural economic issues, including stagnating incomes, high living costs, and limited access to affordable credit. BOT emphasized that policies to address household debt should not only focus on reducing existing liabilities but also prevent future debt cycles. It urged that the issue be tackled through long-term economic reforms, rather than short-term relief measures that may not produce sustainable benefits.
The central bank also pointed out that addressing household debt requires coordination across multiple agencies, as the problem spans banking, consumer finance, and broader economic policies. Any relief initiative must consider the root causes of debt distress while ensuring that government resources are used efficiently to deliver lasting economic benefits.
