Kavita Wongyakasem reacts as she finds out that her bank account is insufficient to pay her bills at her house in Nonthaburi province on the outskirt of Bangkok, Thailand.BANGKOK — Kavita Wongyakasem runs a small business in Bangkok, owns a two-storey house on the outskirts of the Thai capital, drives a pick-up truck, and sends her two daughters to good schools.
Thailand has among the highest household debt to gross domestic product ratios in Asia — behind only South Korea and Hong Kong, according to a Bank for International Settlements ranking — and millions of people, one in every three Thais, are trapped in debt. "If you do the maths, it's about one per cent at the top and the 99 per cent at the bottom," said Pita, who has seen a late surge in popularity.Thailand's central bank is worried. In February, it said that household debt levels should be brought down from 86.9 per cent of GDP at the end of 2022 to below 80 per cent to help reduce financial risks.
The election is building up to be another battle between parties aligned with the military-backed establishment and the populist opposition. Whoever wins will have to contend with the gnawing debt problem. Although a sticky issue for years, the problem has become worse since the Covid-19 pandemic that nearly doubled the number of bad debt accounts to 10 million, according to the central bank.The pandemic didn't ravage Thailand's 71 million people as much as it did those in some other countries but it hammered the heavily tourism-dependent economy and hit incomes.
Kavita said her income dropped during the pandemic but expenses rose as she scrambled to keep her staff of about 20 safe from the virus.