Young people spending beyond their means: BoT governor

By The Nation

 

 

The new generation is spending too much.

 

That’s the point Bank of Thailand Governor Veerathai Santiprabhob tried to get across at the seminar “The Royal Initiative: Immunity for Thai Economic Structure” in Bangkok on Monday.

 

Veerathai said that the household debt was increasing dramatically, partly from the first car policy and the zero per cent retail loan competition. 

 

A look into the behaviour of Thais found that they are spending more money and are incurring higher debts. This was especially so for the new generation, who have just graduated and started to work but are overspending and likely to shop online, he said.

 

The low interest rates for quite some time now have discouraged the incentive to save, Veerathai said. The central bank is therefore trying to encourage more savings by issuing personal credit card regulations, loan-to-value measures, and opening debt-settlement clinics.

 

More than 40 per cent of farmers are still poor, with an average monthly income of Bt4,750, and they are moving to cities to work, so it’s time to believe in the sufficiency economy approach, which must be followed immediately, Veerathai said.

 

The household debt is currently high at Bt12.9 trillion – 78.7 per cent of the gross domestic product, according to the central bank.

 

Source: https://www.nationthailand.com/business/30376321

 

-- © Copyright The Nation Thailand 2019-09-17

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Western culture influence.

Not unusual to see Thais spending 1/3 to 1/2 of their income on car payments.

Add rent and food put the rest on credit cards which are handed out like candy to anyone.

 

On this, a place like the US although higher incomes have major debt and most very little in savings.

National debt 10's of trillion.

 

All has to collapse at some point including here but they have been saying that for years.

 

Zero education in personal finance. And it'll stay that way because the powers that be want to have consumers consuming.

Household debt have been about 76-80% of GDP for the past 5 years. How come to BoT is so alarmed now?

 

Lately it is brought up either by a bank, BoT or some government agency at least one a week.

 

Just guessing, but maybe NPL and SM (special mention) loans are higher than most banks feel comfortable with.

Edited September 17, 20196 yr by ExpatOilWorker

It's a worldwide phenomenon/trap, Thailand is just catching up with the rest of the world.

Edited September 17, 20196 yr by 4MyEgo

Happy to say I don't owe anything to anyone.

OOPS forgot I owe my mate a pack of smokes from two nights ago.

36 minutes ago, ExpatOilWorker said:

Household debt have been about 76-80% of GDP for the past 5 years. How come to BoT is so alarmed now?

 

Lately it is brought up either by a bank, BoT or some government agency at least one a week.

 

Just guessing, but maybe NPL and SM (special mention) loans are higher than most banks feel comfortable with.

Could it be that the debt is now more on the world stage.

100 baht of debt used to represent $3 Australian in debt, now its $5 Australian, or pound, US dollar etc.

1 hour ago, snoop1130 said:

The household debt is currently high at Bt12.9 trillion – 78.7 per cent of the gross domestic product, according to the central bank.

Actually much of that 12.9 trillion baht becomes bank debt when the balloon goes up. Just Like Lehman Bros back in 2009. 

But in sleepy hollow Thailand no one seems to worry. 

BoT governor doesn't realise it's his fault for letting this loose policy and predatory lending to all. Not OK, you have to lend to those who can service their debt and also not enslave those whose simply don't earn enough and are drowning in debt. How people that earn 15k baht a month are lent all sorts is just silly and asking for it really ... moronic really. 

There is a saying that 'you can only spend so much', but it is equally true that 'you can only spend so little'.  If an in work graduate can't afford to service a basic lifestyle then something is wrong wit the economy imo.  Actually we are seeing in work poverty in many countries these days with qualified professionals basically unable to live mostly due to crippling expenses.

 

As for saving, you can only do that if there is any money left at the end of the month!

Duh!

Good thing I pay for everything for my kids. But the key is they have to be good kids. 

1 hour ago, overherebc said:

Happy to say I don't owe anything to anyone.

OOPS forgot I owe my mate a pack of smokes from two nights ago.

Yes you do. You owe everyone that spent time reading your pointless post. You owe us an apology. ???? 

 

Joking!!

2 hours ago, snoop1130 said:

The new generation is spending too much ...  

... it’s time to believe in the sufficiency economy approach, which must be followed immediately, Veerathai said.

If they genuinely believe in the "sufficiency economy" model, maybe it's time that the wealthy bankers, politicians and other elite started to lead by example.

2 minutes ago, chickenslegs said:

If they genuinely believe in the "sufficiency economy" model, maybe it's time that the wealthy bankers, politicians and other elite started to lead by example.

Oh, you mean lead by example like those you noted in all the other countries of the world? Face it, the folks that you suggest lead are only looking out for themselves wherever you go. 

Its not just young Thai people guilty of this, its all of them. My Thai wife's father thinks he can keep spending what he hasn't ever had:because the farang in the family will come to the rescue; well he learnt a big lesson I dont come to the rescue. As I explained to my adult children in another country I am not a walking ATM or a money tree you can help yourself to. The car policy well that was a Yinluck government strategy that went turtle and the low interest loans to any Thai, ask the banks why do they allow it. So BOT grow some balls and set an education strategy in place on budgeting and saving and stop giving away money to people who cant repay.

9 hours ago, mommysboy said:

There is a saying that 'you can only spend so much', but it is equally true that 'you can only spend so little'.  If an in work graduate can't afford to service a basic lifestyle then something is wrong wit the economy imo.  Actually we are seeing in work poverty in many countries these days with qualified professionals basically unable to live mostly due to crippling expenses.

 

As for saving, you can only do that if there is any money left at the end of the month!

Quite a few it seems have plenty of month left at the end of the money.

9 hours ago, chickenslegs said:

If they genuinely believe in the "sufficiency economy" model, maybe it's time that the wealthy bankers, politicians and other elite started to lead by example.

That's funny!.....maybe when the sun rises from the west!

9 hours ago, chickenslegs said:

If they genuinely believe in the "sufficiency economy" model, maybe it's time that the wealthy bankers, politicians and other elite started to lead by example.

They do, they have sufficient

Ask your average Thai to explain ‘sufficiency economy’. 

 

The farmers have it right claiming an annual income of B57K. ????????

 

BTW, sad to see so many contributors virtue signalling . 

Debt Bomb will explode. Worldwide. Lots of losers. And some Winners! Those cashed up. 

12 hours ago, bkk6060 said:

Western culture influence.

Not unusual to see Thais spending 1/3 to 1/2 of their income on car payments.

Add rent and food put the rest on credit cards which are handed out like candy to anyone.

 

On this, a place like the US although higher incomes have major debt and most very little in savings.

National debt 10's of trillion.

 

All has to collapse at some point including here but they have been saying that for years.

 

Usually they spend more than 80% of their income on car payment. The most important it's they can "show".....more than the other one.

They make it too easy for young people to borrow.

For those of you with short memories, this was one of the causes of the big financial collapse around the year 2000, apart from financial institutions loaning out too much money which saw many sky scrapers come to a stand still whilst the same institutions went broke, young and old people owed billions of baht on credit cards, many young people were found to hold several credit cards that they used to pay the month fee's on their other overdue credit cards and so on ... OK, there was a lot more to that financial collapse than that, but those household debts sure added to the situation .... luxury days for my family up here in Laos, the Baht was running at around 26 Bt to the USD, we arrived in BKK for a short break in the October that year and received no less than 52 baht to the USD just outside our Hotel, Boy did we go crazy on purchases as it took quite a while before the retail price of goods were affected !

10 hours ago, Sir Dude said:

How people that earn 15k baht a month

Because that's a high earner in Thailand. Most are making less than 10k per month. 

Please tell me in what country young people don't spend beyond their means.  ????

Thai learn how to budget in school lik they learn English in school right TIT

13 hours ago, snoop1130 said:

Young people spending beyond their means: BoT governor

Yep the household and cost of living has increased drastically..... (apart from their usual desires)

Everyone should aspire to have the best life they can possibly have. Of course you shouldn't spend beyond your means, but that's easier to say when your means are sufficient. 

 

Many Thais who come to Bangkok for the jobs don't make that much money. Add to that they have to pay rent, living expenses and often send money home. They're left with very little if anything. People liking nice things isn't a Western thing. It's a human thing.  You can't expect people to just work, have nothing in life and save for the future until they experience that sweet release of death. I dated girls who made 15k a month and had no money when I first arrived in Thailand. I witnessed their situation first hand. It was miserable. 

 

As John Lennon once said, "Life's is what happens to you while you're busy making other plans". You need more than that one plan of "save for the future".