Thailand’s household debts have increased to 298,005 baht per household which is the highest in nine years, according to the findings of the University of Thai Chamber of Commerce.
Thanavath Phonvichai, director of UTCC’s economic and business forecasting centre, said on Thursday the figures were based on a survey of around 1,200 people this month.
The survey found that household debt rose 20% from about 248,000 baht per family last year.
He noted that household debts increased by an average of 20,000-30,000 baht a year, but, for this year, the debts jumped to 50,000 baht per household by average and the main cause of the increased household debt stems from the obligation to pay instalments for car, credit cards and consumer products averaging 14,889 baht each month.
Thanawat said the findings also show 74 percent of the debtors have defaulted their repayments because their earnings are not enough to repay the debts so creditors who are slow are likely not to get paid on schedules.
Yingluck government’s “first car” policy pointed out
The Yingluck government’s “first car” policy was blamed for causing household debts to jump sharply.
A previous government policy of tax rebates for people buying their first automobiles had triggered the continuing double-digit increase in household debt, he said.
The percentage of informal debt dropped noticeably from 51% to 38%, the lowest proportion in eight years, thanks to lending by state-run banks to debtors, bringing them into the formal financial sector.
This relief measure would slow the pace of household debt, Mr Thanavath said.
The formal debt was up from 49% to 62%.The purchase of durable goods including houses and automobiles increased the debts of 19% of respondents; rising instalments affected 18% of them, and the increased cost of living raised the debts of 13% of the surveyed people.