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.
Thai Credit Guarantee Corporation (TCG) Will Launch Bad Debt Guarantee Program for SMEs
The program will also cover SME loans that have turned into non-performing loans (NPLs), defined as loans overdue by more than 90 days, although these NPLs must not exceed two years of overdue payment.
BANGKOK (NNT) – State-owned Thai Credit Guarantee Corporation (TCG) is preparing to launch a 20-billion-baht bad debt guarantee program to assist struggling small and medium-sized enterprises (SMEs) saddled with bad debts.
Can the Subscription Economy Save Financial Services?
Going back to the pre-Covid “normal” is not an option for financial services. Fortunately, the rise of the subscription economy points towards frontiers of untapped growth for the sector.
As the world waits for mass vaccination to revive economic activity, general malaise has overtaken the financial services industry (FSI). And things will probably worsen before they get better: US banks are expected to suffer US$318 billion in net loan losses by the end of 2022, according to Deloitte.
Asia Pacific Banks shrug off commercial property risks for now
APAC commercial property prices were down around 3% on average in 2020, after a 1% rise in 2019. But the coronavirus-induced decline has been modest compared to past downturns, suggesting that the impact on banks’ commercial real estate loans will generally be much smaller this time.
Foreigners’ Participation in Thai Listed Companies explained
Special vehicles have been created to facilitate foreign investors so that they are able to invest in Thai securities flexibly...
Gambling in Asia: Thailand and more
There is a large demand for gambling throughout Asia, which is detailed below in a comparison between various countries, such...
EEC Expects 300-billion-baht Investment This Year
BANGKOK (NNT) – Thailand expects investment to triple to at least 300 billion baht in the Eastern Economic Corridor (EEC)...
Thailand’s Stock Exchange (SET) market report for January 2021
BANGKOK – The Stock Exchange of Thailand (SET) Index rose inJanuary, though a new wave of COVID-19 pandemic in domestic...
Vietnam’s Binh Dinh Industrial Zone: Opportunities for Foreign Investors
The project will be based in Qui Nhon city, with a total capital of more than US$143 million (3,333 trillion...
Finance Ministry Seeks More Fund for Co-payment Scheme
Fiscal Policy Office (FPO) Director-General Kulaya Tantitemit said the number of registrants exceeded the target of 31 million and could...
Subscribe via Email
Economics6 days ago
1.7 million Thais without smartphones register for "Rao Chana" benefits
National1 week ago
Thailand to further ease COVID-19 restrictions
Business1 week ago
THAI airways to sell training center building to raise more funding
Ecommerce1 week ago
Will Covid-19 unleash a new generation of digital nomads?