Thai second-quarter household debt jumps to 83.8% of GDP as economy shrinks

 

FILE PHOTO: Cars pass a Skytrain (Bangkok Mass Transit System) construction site in Bangkok, Thailand May 13, 2018. REUTERS/Soe Zeya Tun

 

BANGKOK (Reuters) - Thailand's household debt level to gross domestic product (GDP) jumped to 83.8% in the second quarter, the highest since 2003, central bank data showed on Wednesday, as the pandemic hammered the economy.

 

Southeast Asia's second's largest economy suffered its biggest contraction in 22 years in the second quarter and may shrink a record 7.8% this year, the central bank predicts.

 

As of June, household debt increased to 13.59 trillion baht ($429.11 billion), from 13.50 trillion baht at end-March, equal to a revised 80.2% of GDP, already among Asia's highest.

 

The debt ratio was driven by an economic contraction, while the amount rose at a slower pace, Bank of Thailand director Don Nakornthab said in a statement.

 

The debt to GDP ratio may surge to 88-90% at the end of this year, according to Kasikornbank's research centre.

 

The BOT's household debt data is available from 2003.

 

-- © Copyright Reuters 2020-09-30

 

- Whatever you're going through, the Samaritans are here for you

- Follow Thaivisa on LINE for breaking COVID-19 updates

Get ready....

And Thailand is far from the only country that's experiencing this. Too lazy to dig up what the numbers in the west, where huge subsidies were given for sitting at home. I believe many countries must be way over 100% ratio by now.

politicians around the world should be flogged for how they shut down economy

Household debt. Government debt.

........but the THB is holding up firmly.

10 hours ago, tomazbodner said:

And Thailand is far from the only country that's experiencing this. Too lazy to dig up what the numbers in the west, where huge subsidies were given for sitting at home. I believe many countries must be way over 100% ratio by now.

Japan's household debt is around 63.8%. The UK's household debt to GDP is near 85%. Germany has around 94%, so Thailand is just average. How serious this all is depends on the countries ability to sustain/reduce it and whether most of it, like Japan, is internal.

Time for the Thai Reserve Bank to Rev up the Helocopter to save the economy.

12 hours ago, snoop1130 said:

BANGKOK (Reuters) - Thailand's household debt level to gross domestic product (GDP) jumped to 83.8% in the second quarter, the highest since 2003, central bank data showed on Wednesday, as the pandemic hammered the economy

Just waiting for all the lenders to start demanding pay-back.

 

" Southeast Asia's second's largest economy suffered its biggest contraction in 22 years in the second quarter and may shrink a record 7.8% this year, the central bank predicts. "

 

Thailand GDP dropping 7-8% in 2020 is not a horrible figure under the circumstances.  

Will wait to see the actual data months down the road.  

 

 

3 hours ago, soalbundy said:

Japan's household debt is around 63.8%. The UK's household debt to GDP is near 85%. Germany has around 94%, so Thailand is just average. How serious this all is depends on the countries ability to sustain/reduce it and whether most of it, like Japan, is internal.

The country is keeping 20% of GDP shut down indefinitely, that is how they plan to reduce it.

 

Though the "official" stated contribution of tourism to GDP is referred by some to be 20%, that is only the accounting number reported by legitimate business.  There is no doubt if all cash hand outs generated through tourism is accounted for it is much much greater.  I

16 hours ago, snoop1130 said:

Southeast Asia's second's largest economy suffered its biggest contraction in 22 years in the second quarter and may shrink a record 7.8% this year, the central bank predicts.

If someone can tell me how 7.8% GDP drop can be real outside of a General's fairy tale I would appreciate it.

 

If tourism is only say 12% of GDP, that's a 9% GDP drop, exports are down up to 14% and imports down near 20%, millions unemployed, etc.

 

Total brown smelly stuff bravado !

 

 

 

House of cards about to fall down.

16 hours ago, tomazbodner said:

And Thailand is far from the only country that's experiencing this. Too lazy to dig up what the numbers in the west, where huge subsidies were given for sitting at home. I believe many countries must be way over 100% ratio by now.

There are a few differences though. In the west a lot of debt is backed by property. In Thailand it's cars, phones, other rapidly depreciating assets.

Edited October 1, 20205 yr by DrTuner

open the borders, let the tourists come

 

take the few deaths that go with it

 

better than zombie apocalypse

 

or people dying from hunger

 

or muggings/robberies increasing by desperate people

13 minutes ago, DrTuner said:

There are a few differences though. In the west a lot of debt is backed by property. In Thailand it's cars, phones, other rapidly depreciating assets.

Dream on... Americans don't buy property with the credit cards stuffed in their mail... 

 

People buying things they don't need with money they don't have are to be found everywhere in this (unfortunately) globalized world... 

Tourism accounts for more than 10% of global GDP. 

 

Thailand is a bit above this average, yet the world is about to experience a 10% GDP contraction over 12 months, which is going to be extremely painful, if one considers that a mere 1% contraction is already a disaster. 

 

For now, the global society is like the guy who just lost a leg in an accident, not feeling the pain thanks to the influx of adrenaline (in this case, governments handouts), but this won't last... in Thailand and elsewhere... 

1 hour ago, DrTuner said:

There are a few differences though. In the west a lot of debt is backed by property. In Thailand it's cars, phones, other rapidly depreciating assets.

Property used against a Loan is a high class Asset, and should the Loan go bad, the Banks have that Asset to sell on their books.

As DrTuner points out, the Loans issued in Thailand are of a much different class. The Loans are very often issued against not just rapidly depreciating Assets, such as Vehicles, Phones and TV sets, but also against Land that has been overvalued, and property that also falls under the criteria.

All of these  Assets for these Loans is bad Asset, because the Banks have Assets on heir books if the loans go bad, that are worth much less than the value of the Loans.

Household Debt now rising to 83+ % of GDP from a published 79% the previous Quarter is also a worry , as many banks are calling a major rise in NPL for as much as 40%, and a rise of over 4% on GDP in just one Quarter is astonishing, considering the warnings coming from so many Banks.

I know the Economy needs Money to flow, but issuing these Loans is going to bite the Banks in the A## big time.

 

With the non bank  lenders, we know as sharks. I am glad that I only borrow from

banks, as they are more gentle with non payers.  no bone breaking enforcers come

to your door. I met a woman in Chiang Mai who showed me a picture of her

biker cousin with a bat and a pistol, and said he was her repayment enforcer.

  I was glad that I did not need any money.

Good luck to the  unfortunate people who find themselves tò far in debt.

Geezer

Edited October 1, 20205 yr by Stargrazer9889
error