Rate cut not the answerPrime Minister Prayut Chan-o-cha recently asked the Bank of Thailand to review interest rates for credit cards and personal loans to tackle skyrocketing household debt. Thailand's household debt stood at 14 trillion baht last year -- equal to 89.3% of gross domestic product (GDP) -- the highest level in 18 years. Noteworthy is the fact that Thailand's household debt is much higher than corporate debt, which is 9.5 trillion baht. While Gen Prayut meant well, his decision to depend on interest rate cuts to ease the public's debt burden doesn't address the root causes. Indeed, the government should look at GSB's role in pulling down the interest rate of car-for-cash loans in the market as a model.

Source: Bangkok Post June 27, 2021 21:00 UTC