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Is Thailand facing a housing debt bubble ?

Household debt is particularly worrying in Thailand and Malaysia, but the official data may not capture the full picture for families around the region.

Boris Sullivan



The latest survey conducted by the  Thai Chamber of Commerce has revealed worrying revelations that 94% of Thai workers remain  in heavy debt, and of these 60% are unofficial loans.

Umakamon Sinthornsurat, an academic with the Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce,  released the findings carried out on workers in the country yesterday showing that no less than 13.3% earn less than 15,000 baht per month and 55% of this group earn between 15,000 – 30,000 baht per month.

Thailand’s household indebtedness for the whole year is expected to amount to 90% of growth domestic product or GDP, and there is a tendency that the household debt problem will worsen, according to the National Economic and Social Development Board.

The NESDB’s findings show that 85-89 percent of the low income earners such as farmers and general workers have created debts from spendings on consumer products but only 17-18 percent of them are capable of servicing their debts.

More worryingly, 61.9% have monthly expenses between 15,000 – 30,000 baht which mean that they have only marginal savings.

Ninety four percent of workers are heavily in debt and of these 59.6% are unofficial or unregulated loans. On average, this is amounted to a debt burden of 117,839 baht per household and will require around 7,300 baht payments every month.

Household debt across Asia is raising red flags

Household debt is particularly worrying in Thailand and Malaysia, but the official data may not capture the full picture for families around the region.

In Thailand, for example, household debt climbed to a record 85.9 percent of gross domestic product (GDP) by the end of 2014, data from the central bank showed.

While Thailand is seen as much better protected from financial crisis than during the 1997 crisis, the debt data cast further doubt on plans to revive Southeast Asia’s second-largest economy.

The official data can be worrying enough: Malaysia’s ratio of household debt to income is 146 percent, while Thailand’s is at 121 percent, based on mid-2014 data, up from 2007 pre-crisis levels of 139 percent and 93 percent respectively, McKinsey said in a report in February.

The household debt of low-income earners is expected to surge this year, as the glum economic conditions and relatively high cost of living will lead them to rely more on both organised and unorganised loans.

Thanavath Phonvichai, vice-president of research at the University of the Thai Chamber of Commerce, said the household debt of these workers was expected to grow by 10.9% this year to 117,839 baht per family.

“The tepid economy will certainly lead employers to cut overtime payment, lowering their income, while the relatively high cost of living will deal another blow to workers, particularly those earning less than 15,000 baht a month, forcing them to rely more on both organised and unorganised lenders in daily life and to service existing debts,”

he said.

According to the survey, of the estimated 117,839 baht household debt per family, unorganised borrowing from the informal sector including loan sharks represent the lion’s share at 59.6%, while organised loans account for the rest.

Organised loans on average carry an interest rate of 4.3% a month, while unorganised ones carry a rate of 17.9% per month.

“The survey of 1,197 respondents from April 20-27 found as many as 94.1% were in debt, and the proportion of informal loans rose significantly from 56.1% of total debt last year,” Mr Thanavath said.

In a related development, the government is being urged to speed up the introduction of nanofinance services to address the problem of underground loans faced by low-income earners who cannot access formal lenders.

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Thai Baht currency control mulled by central bank

The Industry Minister proposed measures to help business owners, such as the promotion of Thai Baht as a currency for international trade to reduce the risks from US Dollar currency fluctuation

National News Bureau of Thailand



BANGKOK, 15th August 2019 (NNT) – The Minister of Industry has held talks with the Bank of Thailand’s Governor over measures to control the fluctuation of Thai Baht currency, minimize impacts faced by SMEs and promote the import of machinery during this time to take advantage of the stronger currency.

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Thailand’s dangerous debt addiction

Thailand is now a top-ten highest household debt country among 89 countries worldwide and third highest among 29 Asian countries.

Olivier Languepin



Thailand’s household debt has steadily increased to 78.6% of the country’s gross domestic products (GDP), or Bt12.8 trillion in the fourth quarter of last year, according to figures from the National Economic and Social Development Council.

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Thailand’s four challenges : Debt, inequality, plastics and climate change

Thais tended to get into debt faster, for longer and for higher amounts. Indebtedness starts as soon as they begin to work at age 25 and can increase until 56 years old.




Bank of Thailand Governor Veerathai Santiprabhob, in his speech entitled “Formulating for the Future of Corporate Governance”, delivered at the Finance and Beyond National Director Conference 2019 in Bangkok (July 24th), said Thailand faces four challenges that require good governance in businesses to address.

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