Bank of Thailand chooses its targets

Governor wants to maintain focus on structural challenges holding Thai economy back

The Bank of Thailand has vowed to prioritise addressing the country’s structural problems next year to support economic growth and unlock its full growth potential, according to governor Vitai Ratanakorn.

Speaking at a media briefing on Thursday, Mr Vitai said the regulator wants to maintain its focus on structural challenges through targeted measures, highlighting household debt, access to credit for small and medium-sized enterprises (SMEs), the supervision of non-bank financial institutions and illicit financial activities associated with grey money.

The measures are expected to help steady Thailand’s uneven economic recovery, he said. The central bank recently upgraded its GDP growth forecast for 2026 to 2.4% from 2.3%, raising its forecast for 2027 to 2.1% from 1.8%.

“The Bank of Thailand will continue to support economic growth reaching its potential, in line with our monetary policy role. However, we did not set a specific time frame for when Thai GDP growth will reach its potential level,” Mr Vitai said.

To ease household debt burdens, the central bank is continuing with debt restructuring efforts under the existing “Clear Debt, Going Forward” scheme, which has covered 182,000 loan accounts belonging to individual and SME borrowers.

Additional initiatives to help households and SMEs manage their debt burdens will be explored, he noted.

Although the country’s household debt-to-GDP ratio has declined from around 90% to 85.9%, supported by economic growth, household finances remain fragile, particularly among lower-income groups.

“We want to focus on debt affordability at the individual and household levels, as well as household well-being, rather than the overall debt-to-GDP ratio,” Mr Vitai said.

Curbing illicit financial transactions and tackling grey money will remain a focus, with the central bank preparing more regulations governing cash-related transactions as part of these efforts, he said.

New rules being drafted tighten controls on cash transactions involving gold, including a proposed limit of 10 million baht per transaction. The regulations are expected to take effect next month, said Mr Vitai.

The central bank currently requires financial institutions to report gold transactions conducted through digital platforms when the value reaches 50 million baht per transaction.

The bank also introduced various measures to monitor cash transactions and curb grey money, including requiring banks to report cash transactions worth at least 5 million baht per transaction.

Since the introduction of these measures, cash withdrawals exceeding 5 billion baht have declined by 57% year-to-date, while gold withdrawals involving quantities of at least two kilogrammes have fallen by 85%.

To support SME lending, Mr Vitai said the central bank would continue introducing initiatives to expand their access to credit, including the SME Credit Portal, loan guarantee mechanisms for SMEs and the use of alternative data to improve credit assessments.