Household debt

By Pradit Phulsarikij 
Nation Graphics

 

Nation Graphics/Pradit Phulsarikij Nation Graphics

 

Thailand's household debts have been on the rise over the past decade, up from an average of Bt116,681 in 2007 to Bt178,994 in 2017.

 

 

Source: http://www.nationmultimedia.com/detail/national/30352384

 

 

-- © Copyright The Nation 2018-08-18

 

"...Thailand's household debts have been on the rise over the past decade, up from an average of Bt116,681 in 2007 to Bt178,994 in 2017..."

 

This is what you need to know from the multi-coloured graphics that the Nation is so fond of and which are difficult to decipher.

 

When house-hold debt is high, as it is in Thailand, the economic future isn't great. Period.

 

 

Nothing new, all countries household debit increases - example the US household debit is the highest it's ever been

Most young Thai's that I know round my area are working class and live with their family. Many work in family businesses. Examples would be Local shop, garage repair shop, food delivery business, etc. They might also set up businesses alongside their main family business. Hair salon, noodle stand, mini-restaurant, bicycle repair shop, etc.

Most of these young Thai family members have bought new cars. Some have a morgage on a house too.

So by the time the youngsters are 25 years old they have to use most of their income to pay off debts.

That is what I see presently. Ten to fifteen years ago it was very different. Most young Thai's would work at big firms such as auto-makers, construction companies, hotel and leisure industry, farming industry and fishing industry.

There are over 3 million migrant workers in Thailand today. Most working illegally for low wages in dangerous jobs. Thai's didn't need these migrants ten years ago. Now that they are here, young Thai working class have no other option than to work for the family business or start their own.

Another thought is, why don't the big corperations such as Suziki or Honda, move their factories to Burma? Cut out the middleman.

Sure, household dept is common all over the world, with many notable exceptions, for example Germany and Scandinavia where people still hold onto some puritan  values, and being in debt is considered a failing and shameful, as it should be. What makes a Thai household being 200 thousand baht in debt quite shocking, is that in many cases these are people who only earn 20 thousand a month or less. How is someone on such a low income allowed to borrow such a large sum of money, and how will they ever pay it back?

10 minutes ago, Jeremy50 said:

for example Germany and Scandinavia where people still hold onto some puritan  values, and being in debt is considered a failing and shameful,

Guessing you haven't been to Germany or Scand in the past 20 years. Things changed.

If you were to tell me white men over 60 still hold onto puritan values, I'd be more likely to agree.

Edited August 18, 20187 yr by BritManToo

20 minutes ago, Wilsonandson said:

why don't the big corperations such as Suziki or Honda, move their factories to Burma?

Because Burma is way more unstable and likes foreigners even less than Thailand.

Puzzled. Why is there no slice on the wonderful pie chart for money spent on cars/motorcycles?

is it just me or do the people in the graphics look like Southpark characters?

 

 

7 hours ago, Samui Bodoh said:

This is what you need to know from the multi-coloured graphics that the Nation is so fond of and which are difficult to decipher

 

4 hours ago, NCC1701A said:

is it just me or do the people in the graphics look like Southpark characters?

 

 

Difficult to decipher?

Is it just me, I can't understand anything?

The graphs, the info, the images, the details & numbers.

It's just complete gobbledygook.

7 hours ago, rooster59 said:

Thailand's household debts have been on the rise

Delivering his keynote speech at a seminar on “Direction of the SET Index in the second half 2018” hosted by Krungthep Turakij, a sister newspaper of The Nation, he [Finance Minister Apisak Tantivorawong] admitted that public debt would peak in the next four years but assured it would be manageable.  2018-07-20 (my italics)

http://www.nationmultimedia.com/detail/Economy/30350443

A month later:

PM happy with better economic conditions in Thailand  

A survey by the Kasikorn Research Center also found that the living conditions of Thai households improved for the first time in six months, following higher farmer income and employment rate. 

https://www.thaivisa.com/forum/topic/1052623-pm-happy-with-better-economic-conditions-in-thailand/?utm_source=newsletter-20180813-1234&utm_medium=email&utm_campaign=news

What household debt?

Prayut's not worried.

7 hours ago, BritManToo said:

Guessing you haven't been to Germany or Scand in the past 20 years. Things changed.

If you were to tell me white men over 60 still hold onto puritan values, I'd be more likely to agree.

yep Swiss rank number one and Scandinavians as whole are most indebted

http://wolfstreet.com/2017/01/22/these-are-the-countries-with-the-biggest-debt-slaves-and-americans-are-only-in-10th-place/

No financial education = broke <deleted>. 

Ok, but what I am seeing is that 36% of this debt is due to people borrowing to buy a house or land. As more an more people get a university education and move into urban centres away from their family's it makes sense that they are buying houses of their own. Let's not forget that houses for the most part are not depreciating assets, and can be considered an investment (assuming proper build quality and maintenance etc).

22 minutes ago, Katipo said:

Let's not forget that houses for the most part are not depreciating assets

It's the land that appreciates - usually.

The house itself as a physical structure depreciates with time unless it has some unique architectural or historical value, there has been a significant inflation in construction materials that would make the same house (adjusted for age) more costly, or if there's a shortage of housing within a particular price range while there is sufficient financial demand by consumers. Government housing subsidies can create artificial home price increases as well over the short term. 

Edited August 20, 20187 yr by Srikcir
add another factor