IMF Urges Thailand to Strengthen Support for Families Facing Debt Crisis

[snoop1130]

Picture courtesy of Wikipedia

 

The International Monetary Fund (IMF) has issued a stark warning to Thailand to enhance support for struggling families to prevent millions from remaining trapped in a debilitating cycle of debt. Released on April 9, the IMF's Country Focus report emphasizes that over half of Thai workers lack formal employment, which deprives them of job security and essential social protections, leaving them vulnerable to economic disruptions.

 

Many households are resorting to borrowing just to cover basic living expenses, creating a cycle of informal debt that poses a threat to Thailand's financial stability. Although the household debt-to-GDP ratio has slightly decreased to 89% from its pandemic peak, it remains worryingly high. An IMF spokesperson cautions that if this issue is addressed too aggressively without considering broader implications, it could harm consumer spending and business confidence by inadvertently tightening credit.

 

To adequately address the issue, the IMF recommends that Thai policymakers intensify social protections, decrease dependence on informal lending, and foster long-term financial resilience. Thai officials have already initiated several measures, such as repayment assistance, debt restructuring, regulatory crackdowns, and financial literacy campaigns. A significant initiative includes the You Fight, We Help relief scheme introduced in December 2024, which offers borrowers reduced payments, waived interest, and flexible repayment terms.

 

 

 

The Bank of Thailand's responsible lending guidelines, implemented in January 2024, have facilitated the restructuring of over 7 million accounts, with new borrowing caps based on asset levels aimed at curbing excessive debt. However, the IMF insists that further action is necessary, particularly concerning persistent, non-viable debt that permanently excludes borrowers from the formal credit system.

 

The report suggests streamlining personal bankruptcy laws and establishing an efficient debt resolution system. It also urges the Thai government to collaborate with the private sector to lower the costs of household debt resolution. The IMF cites Brazil as a successful example, highlighting a program that allowed defaulters to settle loans at significant discounts through banks without requiring taxpayer funds. This initiative helped over 15 million people restructure debts totalling 52 billion reals, nearly 0.5% of Brazil's GDP between July 2023 and May 2024.

 

The IMF's message is unequivocal: to prevent a household debt crisis from escalating into a national one, Thailand must invest in sustainable support mechanisms for its most vulnerable citizens or risk them falling further into financial distress, reported The Thaiger.

 

-- 2025-04-11

 

 

 

[worgeordie]

Organisations are always trying to help people in debit , while

the folks that live within their means ,even manage to save a

bob or two ,are given no help ,maybe interest rates that are

higher than inflation , when a new Iphone comes out it will

be the poor who will want one by any means ,even if the

one they have is working fine , 

 

regards Worgeordie

[ikke1959]

Maybe a salary raise would be a start, as who can live on a daily wage of not even 400 THB hardly 10 euro a day, while prices are going up, too many holidays and too many costs for kids in school and food 

[DonniePeverley]

They;ve urged thailand to diversify their economy too and stop being reliant on cheap mass tourism. But they never listen.

[Andytheburiramman]

Plenty of new motorbikes, cars and phone shops where I live.  No one is sleeping on the streets, and most still have enough money to buy alcohol so I fail to see the problem 🤔

[ChaiyaTH]

13 minutes ago, Andytheburiramman said:

Plenty of new motorbikes, cars and phone shops where I live.  No one is sleeping on the streets, and most still have enough money to buy alcohol so I fail to see the problem 🤔

That's because you both are super ignorant, not really involved with people their lives as well as not understanding how finance here works.

 

The fact you even start with motorbikes cars or phones, while all of those are the reason most people have huge financial problems, as they are financed with 10+ % interests, is a very funny lol. Maybe you should start about learning what face value in Thailand is, as that's their motivation.

 

Same for alcohol, any of the lowest social classes would have a lot of alcohol and drugs around their lives and houses, anywhere in the world. Last but not least being heavily indebted and classed poor does not mean you have 0 money to live a very basic survival life, not that different with quite some expats here.

 

It actually highlights how bad it really is; their entire life is revolving only around solving their mobility issue (car/bike) and a phone (entertainment). Why you think you barely see diversion in shops to begin with, it's like every city is a copy of another here.

[KhaoHom]

This issue is so complicated and tragic I could write a few thousand words. Thailand's future is no growth, high consumer debt, a workforce stuck in 20th century and government in 19th. Education, for even the upper middle class is worthless. This latest government's policies have been abysmal. The solution appears to be allowing billionaires and shadowy figures own and run casinos and increase tourism despite the nation reeling from crime and scores of unhinged people (often high af)

 

Frankly, the banks and shysters should eat much of the debt without tax compensation. Massive loans to people placing them in debt for life is criminal. Then they wonder why the economy is stalled.

 

Thailand avoids making proper corrections. The system is entirely broken. We see how broken USA is/was with USAID. Anyone that's been here a serious amount of time knows how deep and complicated the corruption is.

 

I made a prediction Vietnam will overtake Thailand in 20 years. Now, with Thailand's intransigence on US tarrifs, unable/ unwillingness to innovate it may only take half that time.

 

The true question is - what is a clear picture of Thailand s future knowing that nothing will change.

[KhaoHom]

On 4/11/2025 at 10:24 PM, ikke1959 said:

Maybe a salary raise would be a start, as who can live on a daily wage of not even 400 THB hardly 10 euro a day, while prices are going up, too many holidays and too many costs for kids in school and food 

You're not incorrect, but the nation runs on cheap labor. It's all relative. BKK office workers make 12-36k pm with most 14-25k.

 

Just giving more money to people is inflationary and solves nothing.

[proton]

well most are still owed the promise of 10k baht from the government, that would help

[watchcat]

On 4/11/2025 at 3:24 PM, ikke1959 said:

Maybe a salary raise would be a start, as who can live on a daily wage of not even 400 THB hardly

 

What about a pension irise 400 baht per day is just a dream to many older people!

[ikke1959]

1 hour ago, KhaoHom said:

You're not incorrect, but the nation runs on cheap labor. It's all relative. BKK office workers make 12-36k pm with most 14-25k.

 

Just giving more money to people is inflationary and solves nothing.

Not giving money they have to work for it and Thailand is much bigger than only Bangkok. And in Bangkok life is much more expensive too. Cheap labour is ok but The Government should start with monthly salaries of a minimum of 13k a month for max 6 working days of max 9 hours.. and 1 day week off and if there is an holiday on a day that is not your free day than you have 2 days off but it are paid days.. just like the Government officials.. and than see what will happen suddenly all holidays and substitute holidays will disappear, which is good for the production and people will be able to buy more which is good for the economy, and the businesses, but the greed of the CEO and shareholders  are so big... They don't see the whole picture only their own wallet and claim they can't afford it.. But the billions of THB they have and millions they earn it should not be a problem that they would earn a few millions less ... Even the superrich don't care The people of Thailand are modern slaves with long working hours low payments and no help.... while others don't know what to do with their money.. Example is the PM.... She and her family will never be able to spend their money they have and earn.. but they should be forced to live with the minimum as people now do for at least a month and things would change very much although, they are so blind and greedy their eyes will never opened. No wonder teh education is kept low, suppose people would see this .... 

[impulse]

3 hours ago, Andytheburiramman said:

Plenty of new motorbikes, cars and phone shops where I live.  No one is sleeping on the streets, and most still have enough money to buy alcohol so I fail to see the problem

 

I walk past about a dozen people sleeping on the streets just between the MRT and my hotel.  And that's on a main drag.  No telling how many are sleeping rough around the corner where it's quieter.  They each have a small pile of what I'd all garbage that they scrounge through to sell on the 2nd hand market or to the recyclers.  Which probably qualifies them as "not unemployed" in the Thai stats, but apparently not in the IMF stats.

 

IMF's Country Focus report emphasizes that over half of Thai workers lack formal employment,

 

[Mavideol]

3 hours ago, KhaoHom said:

You're not incorrect, but the nation runs on cheap labor. It's all relative. BKK office workers make 12-36k pm with most 14-25k.

 

Just giving more money to people is inflationary and solves nothing.

agree, giving more money just pushes them to buy/spend/borrow more... know some couple near me making 110 K month together, couple weeks ago there was a brawl on the street involving the couple's man, I asked what was happening, another neighbor said he didn't pay the loan shark they came to ask him why interest at 25% was not paid, they each have a car and live in a nice house but both gamble a lot the neighbor said

[KhaoHom]

4 hours ago, ikke1959 said:

Not giving money they have to work for it and Thailand is much bigger than only Bangkok. And in Bangkok life is much more expensive too. Cheap labour is ok but The Government should start with monthly salaries of a minimum of 13k a month for max 6 working days of max 9 hours.. and 1 day week off and if there is an holiday on a day that is not your free day than you have 2 days off but it are paid days.. just like the Government officials.. and than see what will happen suddenly all holidays and substitute holidays will disappear, which is good for the production and people will be able to buy more which is good for the economy, and the businesses, but the greed of the CEO and shareholders  are so big... They don't see the whole picture only their own wallet and claim they can't afford it.. But the billions of THB they have and millions they earn it should not be a problem that they would earn a few millions less ... Even the superrich don't care The people of Thailand are modern slaves with long working hours low payments and no help.... while others don't know what to do with their money.. Example is the PM.... She and her family will never be able to spend their money they have and earn.. but they should be forced to live with the minimum as people now do for at least a month and things would change very much although, they are so blind and greedy their eyes will never opened. No wonder teh education is kept low, suppose people would see this .... 

1 Nothing will change

2 Things will get worse

 

Government is not serious about fixing anything. Cash handouts at election time lol.

 

[rattlesnake]

And the solution to do that is… borrow from the IMF! It's just transferring debt to another creditor.

 

The Thai government should stop focusing on foreign tourism, boost its domestic economy and eradicate loan sharks. That would be a good start.

[Guderian]

It's not just Thailand, ministers in the UK are ready to bring back a Covid-style furlough scheme. Downing Street has lined up measures to shield key sectors including the car industry and other sectors that have been hardest hit by the US President’s sweeping tariffs. As well as effectively nationalising the country's last primary steel plant yesterday. The solution to every problem is for government to crank up the printing press and/or go on a borrowing spree, but that can't go on forever. Thailand had enough difficulty raising what money it has managed to (about half of the original proposal of 440 billion Baht) for the 10K Baht digital wallet scheme, how is it supposed to find the cash to underwrite the excessive debts of millions of people? It would have helped f they had bothered teaching them some basic home economics in school so they understood how to budget.

[Stiddle Mump]

The IMF is just touting for business.

 

Get in there before BRICS takes control.

[ikke1959]

3 hours ago, KhaoHom said:

1 Nothing will change

2 Things will get worse

 

Government is not serious about fixing anything. Cash handouts at election time lol.

 

Indeed that is why they delaying the handout everytime.....Not it is planned for September....

[KhaoHom]

2 hours ago, Stiddle Mump said:

The IMF is just touting for business.

 

Get in there before BRICS takes control.

What does this even mean?

 

BRICS is dead. Never happen.