The Bank of Thailand (BOT) has urged caution over the government’s proposal to buy out household debt, warning that any approach must maintain financial discipline, safeguard credit access, and address long-term economic challenges. While discussions are ongoing, the central bank emphasized that the specifics of the plan, including which types of debt would be covered, remain unclear and require further evaluation.
BOT stressed that any debt relief program must avoid encouraging reckless borrowing or creating expectations of routine government bailouts. The bank warned that poorly structured initiatives could undermine financial stability by distorting lending practices and reducing financial institutions’ ability to assess borrower creditworthiness, potentially making credit harder to obtain in the future.
Thailand’s household debt crisis is tied to broader structural issues, including slow income growth, high living costs, and limited access to affordable financing. The central bank insists that policies should go beyond immediate relief and focus on long-term economic reforms to prevent recurring debt cycles. BOT also called for coordination among multiple government agencies to ensure that any intervention effectively addresses the root causes of household debt while optimizing the use of public funds.
