The so called “Chinese debt trap” has drawn a lot of commenting in the media, but Thailand’s biggest debt trap is still home-grown and has reached the value of 78.6% of the GDP, the third highest in Asian countries.
A study by the Bank of Thailand (BOT) has found that overall Thai household debt is still high.
Thai workers’ debt has surged to the highest in 11 years, driven by higher living costs and easier access to loans.
The latest survey by the University of the Thai Chamber of Commerce (UTCC) had 1,200 respondents whose income is 15,000 baht per month or less. It found 95% of them were in debt.
86% of respondents have no savings,
The survey estimated average debt per household at 158,855 baht, the highest level in 11 years, up by almost 15% from 2018.
Some 86% of respondents have no savings, mostly because of higher debt resulting in increased expenses, rising product prices, and higher housing and car loans reports the Bangkok Post
Mrs. Soamrasat Chantharat, Head of Research Group, Puey Ungphakorn Economic Research Institute, BOT, disclosed today that the study of Thai household debt using the credit bureau’s information on loan arrangements for the nine years from 2009-2018, showed that the proportion of household debt owed to large commercial banks and state-owned specialized financial institutions, had continually declined, in contrast to the increase in the growth of debt owed to medium-sized commercial banks and non-financial institutional service providers or nonbanks.
Most loan applications were submitted by existing borrowers
Only one-fifth of loans were granted to new borrowers. Most of them were car loans, home loans, motorcycle loans and personal loans.
Existing borrowers were found to have increased the amounts of new loans, with multiple accounts with many financial institutions, especially unsecured loans which often have a deteriorated credit quality.
With the number growing constantly, together with a concentration of debts and some types of non-performing loans in the market which is highly competitive, such as housing loans and personal loans in Bangkok and its vicinity and large city areas.
80.3% of respondents have defaulted on their debt repayment
Thanavath Phonvichai, vice-president for research at the UTCC, said most workers are concerned about the domestic economic slowdown and their overall sentiment remained weak despite the general election.
“Some 80.3% of respondents have defaulted on their debt repayment in the previous 12 months because they spent more than they earned. They want the daily minimum wage to increase on par with rising costs for utilities, travel expenses and food prices.”Thanavath Phonvichai, vice-president for research at the UTCC
A study found that Thai household debt had an apparent faster growth rate than the country’s economic growth in 2018, with the household debt ratio at 78.6 percent, which is among the top three countries with the highest household debt in Asia.
Household debt picked up again to 78.6% of GDP at the end of 2018 from 78.3% in the previous year. Thais debt load peaked in 2015 at 81.2%.
This directly affects overall economic expansion.
The government sector works continually to resolve the household debt problem by promoting financial knowledge, issuing measures to regulate credit card and personal loans under the supervision of the BOT, and establish debt relief clinics for people to study and truly understand the major causes of debt from spending more money than they earn, especially non-essential spending, purchasing goods beyond their financial level, and a lack of an appropriate long-term financial plan.
The Importance of E-Wallets for Online Gaming Sites
With e-wallets and cryptocurrency being the most relevant options, banks have been put on the side burner, especially when e-wallets and cryptocurrency allow for fast electronic transfer, that is done instantly.
Thai Government to issue Bt50 bln ( $1.57 bln)Savings Bonds to fund COVID-19 Relief Measures
The special savings bonds are available via the “Sasom Bond Mung Kung” e-wallet, abbreviated to “Sor Bor Mor” in Thai on Krungthai Bank’s Pao Tang mobile app, and through four dealer banks. The minimum purchase of these bonds is 1,000 baht, without no maximum. Interest is paid twice a year.
BANGKOK (NNT) – Thailand’s Public Debt Management Office (PDMO) plans to issue “Ying Aom Ying Dai” (the more you save, the more you earn) government savings bonds, worth 50 billion baht, next month, aiming to use the funds to finance state projects to ease the impacts of the pandemic.(more…)
Subscribe via Email
TAT expects 850 billion baht ($25.7 bln) in tourism revenue after successful reopening
The Tourism Authority of Thailand (TAT) has set this year’s revenue target at 850 billion baht, 300 billion of which...
Download 1xBet mobile and play all over the world
Placing profitable bets or playing in a casino is now possible comfortably even without being tied to a computer. It...
3 ways Asia can recover from the COVID-19 pandemic faster
Countries in the East Asia and Pacific region will benefit from cooperation in three major areas: vaccine deployment, reviving sectors...
Thailand’s Vaccine Strategy: What went wrong?
Questions are being asked, and not answered, over the decision to rely almost entirely on Siam Bioscience, a local, palace-owned...
Exclusive interview with Richi Kukreja, HR Lead Director for Zoetis South East Asia
Zoetis is a global animal health industry leader, dedicated to supporting customers and their businesses in ever better ways. Building...