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.

creditcar
The Yingluck government’s “first car” policy was blamed for causing household debts to jump sharply.

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.

loanshark2

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.

Source: Household debt at nine-year peak | 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

TAT and Visa sign MoU to boost tourists spending

The Tourism Authority of Thailand (TAT) and Visa have signed a Memorandum of Understanding (MoU) for the latest collaboration on innovative data-driven marketing strategies with the objective of encouraging Visa cardholders from overseas to spend more while travelling in Thailand.

Bank of Thailand Relaxes Regulations on Non-residents’ Transactions 

The Bank of Thailand is providing more flexibility for non-residents to undertake Thai Baht transactions without submitting supporting documents, including managing Thai baht liquidity in their Non-resident Baht Accounts.

Emerging East Asia Bond Yields Fall on Easing Inflation says ADB

The ASEAN+3 region remains the second-largest sustainable bond market in the world, even as it needs more local currency and long-term financing.