New government urged to exercise caution on debt

Wichayayuth stated that economic measures by the new government should prioritise avoiding additional debt, which would create long-term fiscal burdens. “If debt levels remain high, stimulating the economy will be less effective. Beyond short-term measures, emphasis should be placed on initiatives that can genuinely drive economic growth,” he said.

Key measures include:

1. Promoting domestic products and tourism: Exporting to major markets like the US faces trade barriers and mercantilist pressures. Relying on China is also challenging, as China has competitive advantages across the board. Encouraging domestic consumption and reducing imports can help support the economy. “In the past, the ‘Made in Thailand’ campaign succeeded in boosting domestic production and consumption, providing stronger economic momentum,” said Wichayayuth.

2. Expanding exports and new markets: Efforts should focus on promoting products that can benefit from existing tax measures, as some Thai goods enjoy lower tariffs, creating opportunities to increase exports. Currently, exporters face global economic slowdown and US tariffs. The government should help reduce costs and burdens and facilitate trade, while avoiding measures that increase expenses, such as higher labour costs.

3. Supporting SMEs: Small businesses need targeted support, but banks often limit lending to larger enterprises, worsening conditions for smaller SMEs. Over the past decade, SMEs with NPLs have increased. Measures to assist debtors should not be “one size fits all” but tailored to the specific needs of each group, as a single approach cannot resolve all debt problems.

This approach aims to strengthen the economy without exacerbating Thailand’s already high debt levels.


Business loans skewed toward large firms, small SMEs face rising NPLs

The NESDC also presented research on “Debt and Credit Quality in Thailand’s Business Sector,” conducted by analysts Salinee Boontom and Porntipa Sae-Eaw from the Macroeconomic Strategy and Planning Division.

The study highlighted that business lending in Thailand is highly concentrated. Large firms with credit lines of 500 million baht or more received 90% of total loans from financial institutions, while smaller firms—from super-micro SMEs up to medium-sized businesses with credit lines under 500 million baht—received less than 10% of total lending. This reflects financial institutions’ caution in lending to smaller businesses, likely due to higher perceived risks and limited access to complete credit information.


Rising NPLs among small SMEs

Non-performing loans (NPLs) have shifted noticeably. In 2024, most NPLs came from large firms, but now small and medium-sized businesses are increasingly defaulting. Over 60% of NPLs originate from super-micro SMEs.

“This shift signals growing risks in Thailand’s economic structure, with smaller businesses struggling to survive. Without urgent intervention, employment and long-term economic growth could be affected,” the report warned.

By sector, the five main areas—manufacturing, construction, transportation and retail, accommodation and food services, and real estate—show construction remains a particular concern, with NPLs staying high post-COVID-19. Other sectors had shown signs of recovery after the pandemic but have weakened over the past 1-2 years, reflecting the broader economic slowdown noted since 2024.

Further analysis by loan size indicates that accounts with smaller credit lines (below 20 million baht) have rising default rates across all manufacturing sectors, highlighting the elevated risk for small businesses moving forward.

The findings underscore the vulnerability of small firms that have yet to fully recover from COVID-19, which could constrain the broader economic rebound. Addressing these structural challenges requires urgent cooperation from government, financial institutions, and the private sector to build a strong and sustainable economy.


Five policy recommendations

Based on its study of business-sector debt, the NESDC proposed five policy measures:


Develop financial data infrastructure – Integrate and link databases, such as SME registration records and tax payment data, while utilising initiatives like Your Data and revising the Credit Information Business Act to improve access to credit information.
Implement targeted credit-quality measures – Tailor interventions to the behaviour and characteristics of each business size and sector, recognising that both business scale and industry type affect credit risk.
Establish the National Credit Guarantee Agency (NaCGA) – Strengthen credit guarantee mechanisms to enhance financing access and reduce financial costs for entrepreneurs.
Upgrade and develop small-business capacity – Support through financial assistance, management knowledge and skills development, e-commerce promotion, and networking with larger firms.
Promote large businesses’ role in supporting small firms – Encourage big companies to assist smaller firms within the same industry through financial support, knowledge transfer, and supply-chain integration.