Concerns are mounting over Thailand’s individual and SME borrowers, as their debt leverage ratio and asset quality are seen to be increasingly vulnerable to the sluggish economic growth conditions, says Moody’s Investors Service.

“We do have some concerns around the sectors of the economy that have been exposed to a low-growth environment for a while, which are relatively more vulnerable,” said Gene Fang, Singapore-based associate managing director of the financial institutions group at Moody’s.”

Although we do see household debt topping out or plateauing to some degree, we think that a continued spell of weak macroeconomic growth is going to put continued pressure on some borrowers who may be overleveraged.”

He said non-performing loans (NPLs) in the personal loan segment had recorded the most growth in bad debts, greater than the corporate sector, as the slow economic environment had weakened consumer debt repayment ability.

Thailand’s household debt swelled to 85.9% of GDP or 10.4 trillion baht at the end of last year from 84.7% or 10.2 trillion at the end of the third quarter, the Bank of Thailand reported.

Source: Moody’s sounds warning | Bangkok Post: news

About the author

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

You May Also Like

BoT to explore yuan-baht settlement for Thai-Chinese trade

According to an ADB report, the majority of the significant Southeast Asian emerging markets’ outstanding foreign debt securities have been denominated in dollars for the past few years.

Bank of Thailand Lowers Growth Projection for 2023 to 3.6%

The Bank of Thailand has reduced its growth projection for 2023 due to lower-than-expected GDP and inflation rates.

Taming Thai Household debt

The central bank has also set a goal of reducing Thai household debt to less than 80% of GDP to reduce financial and economic risks. As of the fourth quarter of last year, household debt stood at 15.1 trillion baht, accounting for 86.9% of GDP.