Taking shelter from the scorching sun on a street corner in Bangkok, Kridsada Ahjed regrets the day he ever got mixed up with loan sharks who now devour most of his daily earnings.
“Almost everything I make in a day goes towards paying off the interest on my debt,” he laments.
Unfortunately, Kridsada’s plight is not unique. According to the Bank of Thailand, the country’s household debt has reached nearly 87 percent of GDP, one of the highest in the world. An estimated $1.5 billion of that debt consists of high-interest informal loans.
This personal crisis is just a small part of a larger issue that is plaguing Thailand’s economy. After years of steady growth, the country is now showing signs of being trapped in a middle-income cycle, where low productivity and inadequate education are keeping much of the workforce stuck in low-paying, low-skilled jobs.
While other Southeast Asian nations are recovering swiftly from the economic fallout of the COVID-19 pandemic, Thailand is struggling. The economy only grew by 1.9 percent last year, compared to much higher rates in countries like the Philippines, Indonesia, and Vietnam.
Despite the revival of Thailand’s crucial tourism sector, which contributes about a fifth of the GDP, the outlook for 2024 remains bleak. The World Bank predicts a modest 2.8 percent growth, while neighboring countries are expected to fare much better.
Prime Minister Srettha Thavisin, who took office last year, has acknowledged the economic crisis and is working on various initiatives to stimulate growth. However, critics argue that years of neglecting fundamental economic reforms and investing in education have left Thailand ill-prepared for the digital age.
To boost the economy, Srettha has proposed cash handouts, visa reforms, and legalizing casinos. However, his controversial policies face backlash from economists and political rivals who view them as ineffective and wasteful.
As Thailand grapples with economic challenges, the public’s dissatisfaction grows, posing political risks for Srettha. Without significant reforms and investments in education and technology, the country may continue to lag behind its neighbors and struggle to attract foreign investments.
For ordinary Thais like lottery ticket vendor Hoo Saengbai, the weakening economy means a daily battle to make ends meet as incomes dwindle and essential expenses rise.