TISCO warns Thai debt hits 150% of GDP, risking a society that grows old before it grows rich
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The TISCO Economic and Strategic Analysis Center, or TISCO ESU, says Thailand's overall debt stands at about 150% of GDP, split between public debt expected at roughly 68% of GDP and the remainder from household debt. Although household debt has been gradually declining, the government still has to borrow to shore up the economy, so the country's total debt is not falling. Methas Rattanasorn, head of economic research at TISCO ESU, said Thailand still faces a structural problem of Japanification, with low growth, sluggish inflation and a shrinking labor force, similar to Japan before it entered its lost decades. The share of Thailand's population aged 65 and over has reached 14%, matching Japan, but Thailand took only 28 years to get there. Meanwhile, Thailand's income per head is about 20,700 US dollars, compared with about 37,000 US dollars for Japan, reflecting a situation of growing old before growing rich. The way out is to draw in more investment, because private investment is still below 20% of GDP and reliance on imported capital goods has risen to 14% for every 20% of GDP in investment, up from 11% for every 35% of GDP in investment. Thailand's current account is expected to run a deficit of about 3%, but foreign reserves covering roughly 10 months of imports mean there is not yet cause for concern.