Once touted as the engine of Asia’s rapid growth, Asia’s middle class is now facing growing pains. In Thailand, household debt is squeezing the middle class. The household-debt-to-GDP ratio peaked above 95% in 2021. It currently hovers around 90%, still among Asia’s highest. About 7 in 10 borrowers have limited ability to service their loans, as delinquency rates remain high. With Thailand’s GDP growth already lagging its Southeast Asian counterparts, the central bank worries that the debt crisis will continue to drag on the economy. How did middle class Thais become so indebted? And will the recent government measures to ease the debt burden prove effective?
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