Millions of workers have savings to last for just a month: TMB study

[webfact]

Millions of workers have savings to last for just a month: TMB study

By The Nation

 

 

A TMB study says that eight million Thai workers are at risk of economic difficulty as their savings can sustain them for only 30 days. TMB Analytics Centre executive director Naris Sathapholdecha said that 34 per cent of Thais have sufficient savings or can last for more than six months without work, 45 per cent can manage for 2-3 months while 20 per cent have savings to sustain them for less than one month.

 

In case of unforeseen events such as unemployment from the Covid-19 pandemic, TMB found that 38 million in the Thai workforce are at risk with an average of 8 million people (20 per cent) who cannot sustain themselves for more than a month while another 30 million have savings for more than a month, but only 13 million people can support their families for more than six months.

 

The Bank of Thailand (BOT) reported at the end of February that 101 million accounts of all types were deposits totalling Bt14.15 trillion, an increase of 2.75 per cent or more than Bt3.79 billion. Most of the deposits are not more than Bt50,000, in 88.21 million accounts, amounting to Bt419 billion.

 

“After the Covid-19 outbreak, the burden of expenses may be reduced and lead to savings for use in future. However, the savings behaviour will return to deposits, as can be seen from the deposits growth, while the investment of risk-weighted assets, both real estate stocks and funds, will decrease until the market returns to normal. Therefore, people will save money in the form of deposits this year because it is safe and is protected up to Bt5 million while the banks themselves don't reduce the interest on retail deposits but only on corporate deposits," said Naris.

 

The household savings structure will see funds in deposits increase to 45 per cent, from 37.9 per cent at the end of last year.

 

Household deposits amounted to Bt7.96 trillion, accounting for 37.9 per cent of total savings, followed by funds 24.2 per cent (Bt5.08 trillion), insurance 13.38 per cent (Bt2.81 trillion), and provident fund 19.15 per cent ( Bt4.02 trillion).

 

“This is a good opportunity to control costs, especially trying to reduce unnecessary expenses. Studies show that one in four, or 25 per cent, can be reduced," said Naris.

 

Source: https://www.nationthailand.com/business/30386351

 

-- © Copyright The Nation Thailand 2020-04-20

 

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[bangkokfrog]

I suspect it is the same in many countries. But in Thailand people are fortunate. The government will support the lucky ones for up to 3 months (if it has enough money), by which time they expect tourists to be flocking back for the usual fleecing.

[BritManToo]

So if there are already 10M unemployed and the CoC is expecting up to another 10M to lose their jobs, how come the bank study only expects 8M to be in trouble?

[kevin612]

Even thought it is only 20%, but that’s a lot of people. Economy must reopen on May and close the borders until summer.

[Assurancetourix]

56 minutes ago, BritManToo said:

So if there are already 10M unemployed and the CoC is expecting up to another 10M to lose their jobs, how come the bank study only expects 8M to be in trouble?

Simply because arithmetic and Thai have never been friends.

[mauGR1]

1 hour ago, BritManToo said:

So if there are already 10M unemployed and the CoC is expecting up to another 10M to lose their jobs, how come the bank study only expects 8M to be in trouble?

I would expect the unemployed whose family have land/farms, to go home and live with the family.

For the other few millions of unemployed, well, hope the government can provide alternative jobs, or at least free food for them.

One can only hope now, and Thailand surely is not alone in having big problems.

[smedly]

1 hour ago, BritManToo said:

So if there are already 10M unemployed and the CoC is expecting up to another 10M to lose their jobs, how come the bank study only expects 8M to be in trouble?

agree, and also this unemployment figure only includes those that had recordable employment - they can easily add another 5-10 million to that figure of those in grey employment that the government has no clue about 

[smedly]

1 hour ago, kevin612 said:

Even thought it is only 20%, but that’s a lot of people. Economy must reopen on May and close the borders until summer.

almost 25% of GDP is from tourism and that is likely underestimated due to off book grey employment 

[Assurancetourix]

5 minutes ago, smedly said:

almost 25% of GDP is from tourism and that is likely underestimated due to off book grey employment 

 

Percentage which seems high to me but it is very possible.
To compare with the country which receives the most foreign visitors:

France which received more than 80 million tourists last year.
The percentage in France is around 7%.

[BritManToo]

1 hour ago, smedly said:

agree, and also this unemployment figure only includes those that had recordable employment - they can easily add another 5-10 million to that figure of those in grey employment that the government has no clue about 

I think there will be huge number of home loan (and car loan) defaults, and the whole Thai banking system will be at risk.

What will they do? Let people owing money defer the loans 'interest free' for 4-5 years while the employment market recovers?

There will be massive financial knock-on effects from the COVID lock-down panic.

Edited April 20, 2020 by BritManToo

[seajae]

6 minutes ago, BritManToo said:

I think there will be huge home loan (and car loan) defaults, and the whole Thai banking system will be at risk.

What will they do? Let people owing money defer the loans 'interest free' for 4-5 years while the employment market recovers?

There will be massive financial knock-on effects from the COVID lock-down panic.

mate, there are a lot of loans defaults during normal times as some thais seem to think repaying what they borrow isnt mandatory, this will just increase it with the ones that do pay becoming unable to do so as they will not have the money. How many rely on cash payments from buyers to live on, I know one person that makes up to 1 million baht a year selling  to overseas buyers and with this virus his business will drop to zero as he cannot send anything overseas, then there are all the people that rely on tourists to make their cash, all these people will now be very desperate. Thailand is in for some very rough times without tourism and cash sales.

[Susco]

54 minutes ago, Assurancetourix said:

1 hour ago, smedly said:

almost 25% of GDP is from tourism and that is likely underestimated due to off book grey employment 

 

Percentage which seems high to me but it is very possible.

In case you hadn't noticed, for the past month that percentage increase daily on this forum, populated by armchair economists.

 

It has gone from some 12% a month ago to 25% today, expect more increases in the following weeks as solitary weighs heavy on some.

 

If lock downs stay for one more month, expect to see numbers exceeding 100%

Edited April 20, 2020 by Susco

[kotsak]

29 minutes ago, BritManToo said:

I think there will be huge number of home loan (and car loan) defaults, and the whole Thai banking system will be at risk.

What will they do? Let people owing money defer the loans 'interest free' for 4-5 years while the employment market recovers?

There will be massive financial knock-on effects from the COVID lock-down panic.

Banks have started doing preemptive concessions regarding home loans. My wife got an unexpected call from KBank regarding a loan she had with them, offerring an interest only payment for 6 months (so no need to repay the capital during that time). I think they forsee a tsunami of NPL crushing through soon..

 

[Susco]

2 minutes ago, kotsak said:

Banks have started doing preemptive concessions regarding home loans. My wife got an unexpected call from KBank regarding a loan she had with them, offerring an interest only payment for 6 months (so no need to repay the capital during that time). I think they forsee a tsunami of NPL crushing through soon..

 

And what happens after those 6 months?

 

Do people then have to pay the capital of the previous 6 months on top of their regular payments?

[hotchilli]

3 hours ago, BritManToo said:

So if there are already 10M unemployed and the CoC is expecting up to another 10M to lose their jobs, how come the bank study only expects 8M to be in trouble?

Because they only see what they want to see.. same as the PM

[gk10002000]

3 hours ago, BritManToo said:

So if there are already 10M unemployed and the CoC is expecting up to another 10M to lose their jobs, how come the bank study only expects 8M to be in trouble?

It's the new math.

[metisdead]

Off topic posts and replies have been removed.  This topic is not about Americans living paycheck to paycheck.

 

A post using a disallowed reference to the PM has been removed:

 

Referring to Thailand or the government as a dictatorship, military dictatorship or other such terms will be removed. 

[smedly]

56 minutes ago, Susco said:

In case you hadn't noticed, for the past month that percentage increase daily on this forum, populated by armchair economists.

 

It has gone from some 12% a month ago to 25% today, expect more increases in the following weeks as solitary weighs heavy on some.

 

If lock downs stay for one more month, expect to see numbers exceeding 100%

it was 20% 2019, I am adding to it because the government have no idea how the grey sector contributes or even how many there are working off books but still earning huge money  - we saw this exposed when they offered the 5k support subsidy and over 10m applied

[brain150]

I have 12 people working in my office and none of them can sustain for even 2 weeks from "savings" !!!

And so do most businesses !

The average business in GERMANY can sustain for 21 days !!!

 

The numbers in the article are a nice fairy tale ... sadly they are not true.

 

[worgeordie]

I expect a large percentage have a lot more debt than savings,

into days World there is no incentive  to save,the rates offered 

are below inflation,plus here the wages are not enough to be 

 able to create savings.

regards Worgeordie 

[2 is 1]

Do you actualy know how many thai can get bank loan!? Not many % of population here!

There are much more illegal loans than bank loans!

And loan sharks want they money also! Or lender's will loose everything if not pay back!

[sammieuk1]

Move along PM everyone is rich they just like queueing up for food ????

[Monomial]

2 hours ago, kotsak said:

Banks have started doing preemptive concessions regarding home loans. My wife got an unexpected call from KBank regarding a loan she had with them, offerring an interest only payment for 6 months (so no need to repay the capital during that time). I think they forsee a tsunami of NPL crushing through soon..

 

 

Think they are doing you a favor? That is exactly what the banks want. Just give us our profits and we'll allow you to stay in debt forever. Aren't we kind?

 

What they are afraid of is what is happening to people like us. We don't have money to pay them their interest. So now their revenue stream is at risk just like ours.  Bangkok Bank tried that with us. We told them to go pound sand. We have zero income until international postal services resume. You can take zero payment along with us and share the burden.

 

If the government had any compassion for people at all, they would force the banks to suspend payments interest free for at least 6 months. The banks are rich enough to handle it.

 

Who honestly thinks a banker is going to do anything to help the people?

[marko kok prong]

5 hours ago, BritManToo said:

I think there will be huge number of home loan (and car loan) defaults, and the whole Thai banking system will be at risk.

What will they do? Let people owing money defer the loans 'interest free' for 4-5 years while the employment market recovers?

There will be massive financial knock-on effects from the COVID lock-down panic.

Astute summary,my ex wife has her car hidden,ie covered over at her boyfriends,been there for 3 weeks,i have no doubt the dumb bint would have taken out a loan from the bank with the car as security,as i was stupid enough to buy it for her,now they want the repayments, -Bad loans,hmmm,when did we experience that before?

[gk10002000]

8 hours ago, 2 is 1 said:

Do you actualy know how many thai can get bank loan!? Not many % of population here!

There are much more illegal loans than bank loans!

And loan sharks want they money also! Or lender's will loose everything if not pay back!

To quote my Uncle who was always broke and while a hard worker, not a well paid one: "Banks will only lend you money if you don't need it".  And he was the type that never saved, even back in the 70s would rent things like furniture "curtis mathis works in a drawer TV" etc.  he just never got ahead

Edited April 20, 2020 by gk10002000

[timendres]

10 hours ago, Susco said:

And what happens after those 6 months?

Do people then have to pay the capital of the previous 6 months on top of their regular payments?

Depends, but often the life of the loan is simply extended until it is repaid. In other words, you go back to the original payment, with the (unchanged) remaining balance.

[timendres]

10 hours ago, kotsak said:

Banks have started doing preemptive concessions regarding home loans. My wife got an unexpected call from KBank regarding a loan she had with them, offerring an interest only payment for 6 months (so no need to repay the capital during that time). I think they forsee a tsunami of NPL crushing through soon..

"Interest only" is not a lot of help when you are at the front end of the loan, and interest is 80% of the payment.

[mikebell]

Only the rich have savings - generals/police/politicians.  The rest live hand-to-mouth month-end to month-end.  These figures are under-estimated.  The rich are often very rich and their deposits skew the average quoted above.

[Prairieboy]

On 4/20/2020 at 3:46 AM, webfact said:

34 per cent of Thais have sufficient savings or can last for more than six months without work, 45 per cent can manage for 2-3 months while 20 per cent have savings to sustain them for less than one month.

And 1% could be sustained forever!