Thailand must manage debt to progress

This article may be read as a continuation of my previous piece, Year of the Debt.

- Chartchai Parasuk

Consumers seek advice about debt solutions at the Bank of Thailand's Debt Clinic service at the Money Expo 2024.

That article focused mainly on household debt, which has already risen beyond the ability of Thai consumers to repay.This article broadens the scope to include government and business debt and shows, once again, that these debt levels are also beyond the capacity of the economy to sustain. Excessively high debt — across government, business and households — will make the much-invoked dream of economic restructuring impossible.

It is well known that Thailand’s GDP growth lags behind that of other Asean economies. Thailand’s GDP growth in 2025 is estimated at 2.2%, while Vietnam, Malaysia and Singapore recorded growth rates of 8.02%, 5.1% and 4.8% respectively. Worse still, the IMF projects Thailand’s growth rate will slow further to just 1.6% this year. This is a red-flag warning that calls for an immediate restructuring of the entire economy. Such restructuring is said to include the development of new S-curve industries, investment to upgrade and modernise existing factories, an overhaul of the education system, and the reskilling of workers.

All of this requires money — a lot of money. For a start, investment must rise from its current low level of around 20% of GDP to the developing-economy standard of about 30% of GDP. That additional investment translates into roughly 2 trillion baht a year. Over a five-year restructuring period, the total would reach 10 trillion baht. The question is obvious: where will this 10 trillion baht come from? No political party ahead of the next election has seriously addressed the issue, as if money can simply fall from the sky. One major party talks about using “science and technology” to overhaul the economy. My question is simple: are science and technology free, or do they have to be paid for?

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