Thailand’s central bank expects household spending growth to slow after a government subsidy ends this month, as rising unemployment adds another strain to consumers already carrying heavy debt.
The Bank of Thailand’s Monetary Policy Committee (MPC) projects private consumption will grow 2.3% in 2026, down from its earlier 2.6% estimate. Without support from the “Thais Help Thais Plus” co-payment program, the committee expects growth of 1.6%. Its 2027 forecast is 1.7% after the scheme expires.
Exports and investment have supported economic growth, while household spending has been weaker than the MPC expected. At a news conference after last week’s committee meeting, MPC secretary Don Nakornthab said unemployment had reached 1.1%, up from a recent low of 0.8%. Among people insured under Section 33 of the Social Security Act, more had been registering for unemployment benefits after losing work, though the most recent count edged lower.
The central bank also reduced its estimate of the program’s contribution to gross domestic product (GDP) growth this year to 0.4 percentage points from 0.5. Government data showed about 162 billion baht in spending through September, including 93 billion baht from the government and 69 billion baht from consumers.
Tris Rating estimates the program’s first phase, which ran from June to September, added 0.4 percentage points to GDP growth. It expects the second phase, scheduled from October through November, to add 0.1 percentage point. Boondhiva Cheewatragoongit, Tris Rating’s manager for economic and industry research, said the subsidy could support activity temporarily. She said a durable recovery would require households to regain spending capacity while the government maintains budget flexibility.
Household debt was 85.2% of GDP in the second quarter, down from 86.7% at the end of 2025, but it remains a constraint on consumption. Don said the central bank is monitoring employment conditions because they affect household spending and the ability to repay debt. The program’s second phase is due to end in November.
