Thais vulnerable to income shock from economic slowdown, says central bank

By The Nation

 

Titanun

 

The central bank is concerned about the rising household debts, Titanun Mallikamas, assistant Bank of Thailand governor responsible for monetary policy, said on September 2.

 

His comment came after the National Economic and Social Development Council raised an alarm about rising household debts at a press conference the same day. 

 

Household debt nationwide stood at Bt13 trillion, rising by 6.3 per cent and accounting for 78.7 per cent of the total GDP – which has been the highest level since the first quarter of 2017. 

 

“We are closely monitoring household debts, as Thai families are vulnerable to an income shock during the economic slowdown,” he said. 

 

As for the low inflation rate of 0.52 per cent in August, which raising concerns about the risk of economic deflation, he said that inflation in the recent months was lower than the 1-per-cent target for the entire year. 

 

He noted that at its last meeting, the central bank’s monetary policy committee expressed worries about low inflation and slower economic growth, leading to a decision to cut the rate by 25 basis points to 1.5 per cent.

 

He further said that the central bank’s move will help boost economic growth and inflation rate could return to the target of 1 per cent. The central bank and Finance Minister Uttama Savanayana will discuss the inflation target and subsequent monetary policy later, he said. 

 

However, Titinun did not indicate that the central bank will lower its interest rate again.

 

Source: https://www.nationthailand.com/business/30375738

 

-- © Copyright The Nation Thailand 2019-09-03

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Right—don’t bother to lower interest rates.  Just let the economy continue to tank from the rising and overpriced Baht.  Someone’s still drunk on those ChiCom hot money inflows from high interest rate bond sales...

5 hours ago, webfact said:

The central bank is concerned about the rising household debts, Titanun Mallikamas, assistant Bank of Thailand governor responsible for monetary policy, said on September 2.

 

Now we know what the face of the person who is responsible for the senseless increase of the Baht is, the gentleman is also responsible for the loss of jobs, everything is linked to the currency that you handsome gentlemen used for speculation!
The people pay for your "MISTAKES"!

never really lowered the interest rate as some idiot had already raised it so it just went back to previous figure.
needs be cut again and quicker the better.

Banks created most of the debt issue by handing out loans far too easily and with little income proof required .

I got a few thai friends feeling the pinch, one pawned 100K of gold, should of sold it as no way they going get it back and paying pawn dealer fees just more money lost lol .

Never mind I got no debt and don't rely on thailand for any income thankfully .

vietnam and malaysia taking most of the foreign production and tourists, even cambodia doing better . Thailand is on edge of big problems and more so with uncle buck banana blowing money to the chinese and covering farming losses with no future improvement plans in place .

Next 18months should be more than shocking 555

12 minutes ago, 30la said:

Now we know what the face of the person who is responsible for the senseless increase of the Baht is, the gentleman is also responsible for the loss of jobs, everything is linked to the currency that you handsome gentlemen used for speculation!
The people pay for your "MISTAKES"!

Unfortunately the Bahts rise isn't senseless or without reason, international investors park their money here because it's safe and gives a profit. The Thai central bank fears that lowering rates would encourage more people to make debt and America may turn it's bloodshed eyes on Thailand and accuse it of being a currency manipulator (only the USA is allowed to do that). Brexit and the USA are doing their bit as well to upset currency markets and production worldwide, it's a perfect storm no doubt about it and us ex-pats are sitting in its path.

Doubt this guy is paying his electricity bills. These official inflation rates are blatant lies.

Would seem the really educated ones see and recognise the rising problems while the fake ones in charge of the country still thin all is honky dory.

 

of course debt is rising when people are not making money to service their debts. People in tourism related jobs and businesses are suffering , people in export related jobs are suffering 

“... Thai families are vulnerable to an income shock during the economic slowdown...”

BS. For the middle, upper classes, and those who want to appear as though they are part of those classes, what they are vulnerable to is going into debt by buying things they don't need without having enough money, and in many instances, buying those things to impress people they don't even like. Not only does having/saving face make one look stupid, it also leads them into poverty. 

 

Edited September 3, 20196 yr by jaltsc

3 hours ago, soalbundy said:

Unfortunately the Bahts rise isn't senseless or without reason, international investors park their money here because it's safe and gives a profit. The Thai central bank fears that lowering rates would encourage more people to make debt and America may turn it's bloodshed eyes on Thailand and accuse it of being a currency manipulator (only the USA is allowed to do that). Brexit and the USA are doing their bit as well to upset currency markets and production worldwide, it's a perfect storm no doubt about it and us ex-pats are sitting in its path.

That perfect storm has yet to hit Australian expats. Here is the prediction chart for the AUD v USD through to 2023. The AUD is heading toward 66C as we speak. By the end of 2020 it is expected to slip below 60C. It doesn't bear thinking about how many baht to the AUD by then (providing the baht holds up). 

https://longforecast.com/australian-dollar-aud-to-usd-forecast-2017-2018-2019-2020-2021

 

In the meantime back at the ranch in Vietnam i have just purchased a reasonable size annual bank bond which pays 9%. I now have this Bond plus a term deposit with the same bank which pays 8%.

Before you sceptics start on me I have had this term deposit for 12 years and they always pay on the due date. In fact on the day preceding maturity they send me an SMS telling me to drop by and pick my interest dividend.

Do the banks in Thailand send an SMS when the 1% (or similar) is due on the compulsory marriage visa deposit?

There are some benefits in headquartering in Vietnam despite the petty things the knockers say about it.

I have the best of both worlds by setting up camp and working part time in Vietnam while spending a lot of my leisure and working time in Thailand. 

There will be a glut of cheap still overpriced pickups and houses as the banks repossess all assets to make sure theirs assets remain unaffected of course????   

7 hours ago, webfact said:

“We are closely monitoring household debts, as Thai families are vulnerable to an income shock during the economic slowdown,” he said. 

But how much of the debt is through registered channels? There's so much informal debt along with the loan sharks that the figure they've provided is probably grossly understated. And I don't see how any Government body can monitor this.

Loan sharking a prominent business, here in Isaan.  And the more debt the govt. allows, the more people will eventually lose.  Stop the hot money inflows at BoT, and the economy will begin to recover.

Apart from the chosen ones who have a good income and can manage nicely the rest of the country is struggling on a normal income to meet the needs of daily life, buying a car, buying a home & sending one or more kids to school... the only answer for them is to borrow from someone & try to pay back later....

While the elite fill their multi million baht bank accounts and the top end earn 200,00 plus a month all the other are on 15,000 to 25,000 baht which soon disappears!

By income shock , I suppose he means loss of jobs and also inability to repay loans. But I guess "income shock" sounds more trendy.

I have always followed Mr.Micawber's advice.

"Mr Micawber's famous, and oft-quoted, recipe for happiness: "Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds  and sixpence, result misery."

 

its served me very well,in  today's World everything is done to help those in debt,

and how are citizens given the incentive to live within their means,when their own

Governments are up to their eyes in debt 

regards Worgeordie 

Just put a 2 year moratorium on sticking nose into trough. 

Let the money flow where it should and ride out the storm. 

Oh well. Just allow more citizens to qualify for poor status, give them more cash handouts then finance it by selling even more bonds to the Chinese .

 

What could possibly go wrong ?

The last thing we need is hypocritical crocodile tears about "vulnerable" Thais from the well-heeled banking plutocrats.

 

They won't be the ones to suffer when the economic downturn hits. The main victims will be millions of ordinary working people unable to continue repayments on reckless bank loans that should never have been granted in the first place.

 

Millions of modest savers will also be penalised by further reductions in deposit interest rates, already below the level of inflation. Only the very wealthy, with millions to invest, will be offered reasonable returns.

 

Needless to say, when the economy tanks the banks will once again enjoy a bonanza of repossessions and the chance to pick up juicy bankrupt assets for cents on the dollar. 

 

Nice work, if you can get it.

Edited September 3, 20196 yr by Krataiboy

9 hours ago, webfact said:

“We are closely monitoring household debts, as Thai families are vulnerable to an income shock during the economic slowdown,” he said. 

Telling Thais to cut spending down will be like Kanute telling the sea to go back

6 hours ago, Isaan sailor said:

Right—don’t bother to lower interest rates.  Just let the economy continue to tank from the rising and overpriced Baht.  Someone’s still drunk on those ChiCom hot money inflows from high interest rate bond sales...

They just lowered the rate ????

Most interesting is that SCB is not giving out credit cards without a arm and leg worth of info and really doesnt want to provide more consumer debt because they are getting lots of defaults and people using it irresponsibly (no surprise there)

Plus you have the shut downs all over so tick tock tick tock 2008 again anyone?

2 hours ago, Krataiboy said:

The last thing we need is hypocritical crocodile tears about "vulnerable" Thais from the well-heeled banking plutocrats.

 

They won't be the ones to suffer when the economic downturn hits. The main victims will be millions of ordinary working people unable to continue repayments on reckless bank loans that should never have been granted in the first place.

 

Millions of modest savers will also be penalised by further reductions in deposit interest rates, already below the level of inflation. Only the very wealthy, with millions to invest, will be offered reasonable returns.

 

Needless to say, when the economy tanks the banks will once again enjoy a bonanza of repossessions and the chance to pick up juicy bankrupt assets for cents on the dollar. 

 

Nice work, if you can get it.

Just buy gold my friend - and put your savings into land

7 hours ago, BuckBee said:

never really lowered the interest rate as some idiot had already raised it so it just went back to previous figure.
needs be cut again and quicker the better.

Banks created most of the debt issue by handing out loans far too easily and with little income proof required .

I got a few thai friends feeling the pinch, one pawned 100K of gold, should of sold it as no way they going get it back and paying pawn dealer fees just more money lost lol .

Never mind I got no debt and don't rely on thailand for any income thankfully .

vietnam and malaysia taking most of the foreign production and tourists, even cambodia doing better . Thailand is on edge of big problems and more so with uncle buck banana blowing money to the chinese and covering farming losses with no future improvement plans in place .

Next 18months should be more than shocking 555

The only debt I have is a truck payment but I don't rely on Thailand for income

3 hours ago, MartiniMan said:

Just buy gold my friend - and put your savings into land

Unfortunately, the financial mafia are conspiring to keep gold prices artificially low. And buying land in Thailand can, as I understand it, only be done either through forming a company which must have with a majority of Thai shareholders, or via a Thai wife - who for all legal and practical purposes, is the sole shareholder. 

14 hours ago, Krataiboy said:

Unfortunately, the financial mafia are conspiring to keep gold prices artificially low. And buying land in Thailand can, as I understand it, only be done either through forming a company which must have with a majority of Thai shareholders, or via a Thai wife - who for all legal and practical purposes, is the sole shareholder. 

The central bank that started this process now highlights the probable result!