\nNew government urged to exercise caution on debt<\/p>\n
Wichayayuth stated that economic measures by the new government should prioritise avoiding additional debt, which would create long-term fiscal burdens. \u201cIf 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,\u201d he said.<\/p>\n
Key measures include:<\/p>\n
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. \u201cIn the past, the \u2018Made in Thailand\u2019 campaign succeeded in boosting domestic production and consumption, providing stronger economic momentum,\u201d said Wichayayuth.<\/p>\n
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.<\/p>\n
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 \u201cone size fits all\u201d but tailored to the specific needs of each group, as a single approach cannot resolve all debt problems.<\/p>\n
This approach aims to strengthen the economy without exacerbating Thailand\u2019s already high debt levels.<\/p>\n
\nBusiness loans skewed toward large firms, small SMEs face rising NPLs<\/p>\n
The NESDC also presented research on \u201cDebt and Credit Quality in Thailand\u2019s Business Sector,\u201d conducted by analysts Salinee Boontom and Porntipa Sae-Eaw from the Macroeconomic Strategy and Planning Division.<\/p>\n
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\u2014from super-micro SMEs up to medium-sized businesses with credit lines under 500 million baht\u2014received less than 10% of total lending. This reflects financial institutions\u2019 caution in lending to smaller businesses, likely due to higher perceived risks and limited access to complete credit information.<\/p>\n
\nRising NPLs among small SMEs<\/p>\n
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.<\/p>\n
\u201cThis shift signals growing risks in Thailand\u2019s economic structure, with smaller businesses struggling to survive. Without urgent intervention, employment and long-term economic growth could be affected,\u201d the report warned.<\/p>\n
By sector, the five main areas\u2014manufacturing, construction, transportation and retail, accommodation and food services, and real estate\u2014show 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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
\nFive policy recommendations<\/p>\n
Based on its study of business-sector debt, the NESDC proposed five policy measures:<\/p>\n
\n\tDevelop financial data infrastructure \u2013 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.
\n\tImplement targeted credit-quality measures \u2013 Tailor interventions to the behaviour and characteristics of each business size and sector, recognising that both business scale and industry type affect credit risk.
\n\tEstablish the National Credit Guarantee Agency (NaCGA) \u2013 Strengthen credit guarantee mechanisms to enhance financing access and reduce financial costs for entrepreneurs.
\n\tUpgrade and develop small-business capacity \u2013 Support through financial assistance, management knowledge and skills development, e-commerce promotion, and networking with larger firms.
\n\tPromote large businesses\u2019 role in supporting small firms \u2013 Encourage big companies to assist smaller firms within the same industry through financial support, knowledge transfer, and supply-chain integration.
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