Thailand’s economy is stuck in a low-growth cycle and risks prolonged stagnation if structural problems are not addressed, Bank of Thailand (BOT) Governor Vitai Ratanakorn said on Tuesday, February 24. Speaking at the “Thailand Economic Drives 2026” seminar hosted by Post Today, he outlined targeted measures aimed at tackling non-performing loan (NPL) debt and regulating gold transactions. The immediate focus is on easing household debt pressures and improving loan quality to support sustainable recovery.

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Vitai said the root causes of the slowdown include high household debt, which stands at 86–87% of GDP, and rising concerns over the quality of NPLs, which have been increasing steadily. Loans to small and medium-sized enterprises (SMEs) have contracted for 14 consecutive quarters, reflecting ongoing financial strain in the sector.

Despite these challenges, he noted positive factors supporting the economy, including Foreign Direct Investment (FDI) applications worth 1.8 trillion baht in modern industries and continued strength in tourism. Although visitor numbers have not yet returned to pre-pandemic levels, tourism revenue remains strong and continues to underpin economic activity.

Vitai stressed that interest rates alone cannot resolve productivity issues or strengthen national competitiveness. In response, the BOT has adopted a more proactive stance, introducing “targeted measures” alongside conventional monetary policy tools. Over the past four months, the central bank has prepared four key initiatives, including a national asset management company (AMC) mechanism to address bad debt.

Under this approach, NPL assets valued at under 100,000 baht per account have been transferred from commercial banks to Sukhumvit Asset Management (SAM), acting as a “national AMC”. Around 1.1 million accounts were included in the transfer. The scheme is designed to prioritise “helping people, not profit”, enabling individuals with smaller debt burdens to re-enter the economy sustainably.

The transfer of assets was completed on January 1, with phase one of the debt tracking and management system finalised in early February. Debtors are now being invited to participate and the project is scheduled to run for two years. The BOT estimates that between 30% and 50% of accounts, or around 300,000 to 500,000 people, could benefit from the programme.

The Nation reported that Vitai said the initiative marks only the beginning of broader efforts, with further measures to follow through cooperation between the central bank, the Ministry of Finance, commercial banks and other relevant agencies. The aim is to systematically reduce household debt and stabilise long-term economic growth.

Picture courtesy of The Nation

Key Takeaways

• Thailand faces prolonged low growth driven by high household debt and rising NPL concerns.

• The BOT has transferred 1.1 million small NPL accounts to SAM under a national AMC model.

• Up to 500,000 debtors could benefit over the scheme’s two-year operational period.

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Adapted by ASEAN Now Nation 25 Feb 2026

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"...the root causes of the slowdown include high household debt..."

So, the BOT is openly warning that growth remains weak and that rising bad debt needs targeted intervention.

When a central bank shifts focus to managing NPLs rather than talking about expansion, it’s hardly a sign of momentum.

Governor Vitai may be trying to stabilise the situation, but without deeper structural reform it looks like the sick man of ASEAN just keeps getting sicker!

I just read another thread that some sectors were booming and had 24% growth, now it is stagnating! If the currency is too strong that usually is a positive economic indicator,

Mr. Anutin ordered a grow of 2,5%.. but with all the negative news the THB is still too strong. It seems nothing can weaken it. That is a problem for the economy as THailand is far too expensive.. You can see the prices too. In Phuket a five star hotel with a 8k THB room and a too expensive THB compared to Vietnam for half price is for a tourist not difficult to choose where to go.

Besides that everything is getting very expensive the foreign people living here will receive less money from their pensions or money from abroad.. It will limit their spendings too.. I believe with the same Government nothing is going to change quickly, as we have seen in the past years. Conservative attitude and corruption will continue, the people don't get decent wages and the 50/50 will cost more than it benefits..Thailand is on the edge but they only are proud on their strong THB, but don't see the damage it is doing for their economy

20 hours ago, ikke1959 said:

Mr. Anutin ordered a grow of 2,5%.. but with all the negative news the THB is still too strong.

Yes, but a strong baht keeps the cost down of the near 1 million barrels of crude oil per day they buy, which supports the economy.