Thailand’s high household debt, at 86.8% of GDP in Q2 2025, will continue to constrain banking sector growth in 2026, despite banks aiming for positive loan expansion to bolster the economy. Kris Chantanotoke of SCB emphasizes that high household debt remains a structural challenge, limiting credit access and posing risks amid sluggish growth prospects—projected at 1.5% for 2026, the slowest in three decades.
External pressures like global slowdown and trade tensions, combined with domestic issues such as political uncertainty and weak purchasing power, further hamper growth. Kris warns of a potential “self-fulfilling prophecy” where negative sentiment could hinder economic activity.
Despite these headwinds, SCB plans cautious loan growth, focusing on corporate, mortgage, and auto lending, with risk management a priority. The bank also aims to support vulnerable sectors and collaborate with government initiatives. Similarly, Bangkok Bank expects subdued growth, emphasizing client support and prudent asset quality management.
Overall, experts highlight that structural reforms and increased investment are vital to strengthening Thailand’s economy and boosting long-term competitiveness amid ongoing challenges.