Household borrowing rose to 78% of gross domestic product in 2012, Bank of Thailand Governor Prasarn Trairatvorakul told reporters Monday evening, adding that a level of 80% might put the country’s financial stability at risk. At 8.82 trillion baht ($286 billion), household debt in 2012 was up 88% from 2007, when it stood at 4.68 trillion baht, the central bank data showed.
Bank of Thailand Gov. Prasarn Trairatvorakul, here in January, says household debt is surging toward the destabilizing point.
About 40% of the total household credit was issued by commercial banks, while 30% was issued by government financial institutions, such as the Government Housing Bank and the Bank for Agriculture and Agricultural Cooperatives.
Mr. Prasarn cited government stimulus programs, such as the auto-buyer incentives, as a factor in credit growth. About 1.2 million vehicles were sold under the first-car tax-rebate program, introduced by Prime Minister Yingluck Shinawatra last year to boost domestic spending after widespread flooding devastated the country’s economy in 2011.