Finance Ministry: Most household debt is good debt

 

 

BANGKOK (NNT) - Although Thailand’s household debt has increased due to the COVID-19 crisis, household debt in many countries has also risen. More than half of typical household debt is good debt, including home loans and business loans. The government and the Bank of Thailand (BOT) have continually taken measures to help debtors repay their creditors.

 

Adviser to the Fiscal Policy Office (FPO), Wuttipong Jittungsakul, said today the COVID-19 situation caused the economy to contract in 2020, raising the level of household debt against gross domestic product (GDP) to 86.6 percent in the third quarter of last year. The figure was calculated using the country’s GDP growth rate in 2020, a negative 6.1 percent.

 

Other countries, such as Australia, Norway, Sweden, the Netherlands, Canada, South Korea and Malaysia, have also experienced similar circumstances. Their household debt to GDP ratio increased by between 87.5 percent and 128.1 percent. More than half of Thailand’s household debt is good debt, as people acquired loans to improve their quality of life. Thirty-four percent was in home loans, 30 percent was for personal consumption, 18 percent was in business loans and 13 percent was car and motorcycle loans.

 

Since the COVID-19 crisis, the government and the central bank have rolled out debt relief measures, such as extending repayment periods, suspending debt repayments, reducing interest rates, implementing debt restructuring and waiving interest payments. As a result, most debtors are able to repay their loans as usual, while the number of people asking for assistance has decreased. Once the economic situation improves, household debt is expected to decrease.

 

-- © Copyright NNT 2021-03-08

 

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

- Follow Thaivisa on LINE for breaking COVID-19 updates

it is if you can afford to pay it back, but if you have lost your job due to Covid, how is it a good thing to be in any debt at all? 

"More than half of Thailand’s household debt is good debt, as people acquired loans to improve their quality of life".

 

Good grief. The idiocy of these louts surpasseth my understanding, I'm just about fed up with their mealy-mouthed platitudes pretending that we aren't wading through knee-deep <deleted> every day.

 

I'm just about disgusted with Thais and I didn't start out with any great admiration for their intellect.

I must be a bad guy then as I don't owe anything to anyone. Well except the packet of cigs I owe my mate from our last night out.

It is only "good debt" if it is earning more interest than is required to service the debt........

On a falling real estate market, even the otherwise sensible mortgage is a very bad debt.

The rest of debt, credit card or consumer never been good to start with.

Business debt isn't household to start with, but doesn't take a genius to see more businesses failing than normal in the past year and this year.

 

 

On 3/8/2021 at 9:07 PM, Taswegian23 said:

"More than half of Thailand’s household debt is good debt, as people acquired loans to improve their quality of life".

 

Good grief. The idiocy of these louts surpasseth my understanding, I'm just about fed up with their mealy-mouthed platitudes pretending that we aren't wading through knee-deep <deleted> every day.

 

I'm just about disgusted with Thais and I didn't start out with any great admiration for their intellect.

Agree, I don't really understand what he means by "good debt". Maybe good in the sense that it can be repossessed (real estate, auto loans) and has some value at least?

What is bad debt then?

This guy is trying to polish a curd and making it into a wet patch. The statement that its good debt is ludicrous.

Why can't people ever say it as it is. It is a sit storm.

3 hours ago, bkksteve123 said:

Agree, I don't really understand what he means by "good debt". Maybe good in the sense that it can be repossessed (real estate, auto loans) and has some value at least?

What is bad debt then?

Bad debt being that owed to the money-lender types who will come and break your legs ?

Good debt is having a mortgage in a western country with equity.  Tax write offs, etc.

I cannot count how many Thais I know who make 15,000 b a month and their car payment is 1/2 that.

29 minutes ago, Laughing Gravy said:

This guy is trying to polish a curd and making it into a wet patch. The statement that its good debt is ludicrous.

Why can't people ever say it as it is. It is a sit storm.

You can't say it as it is because the software won't allow s*it ????

A personal debt is never good, unless you have a guaranteed salary, perhaps as a government employee.

On 3/8/2021 at 6:55 PM, Pilotman said:

it is if you can afford to pay it back, but if you have lost your job due to Covid, how is it a good thing to be in any debt at all? 

It's  like  being shot, in  the head or  in the leg, neither are any good, what happened to NOT being in debt, the world is  outta  control.

9 hours ago, Joe Farang said:

You can't say it as it is because the software won't allow s*it ????

You  need to add some value to it like this,  $hit

Is this Guy having a laugh, he needs to get real, and visit a few villages and ask people, he would certainly change his tune then. 

22 hours ago, bkksteve123 said:

Agree, I don't really understand what he means by "good debt". Maybe good in the sense that it can be repossessed (real estate, auto loans) and has some value at least?

What is bad debt then?

I believe they refer to good debt as a secured loan, versus bad debt—an unsecured loan.

On 3/8/2021 at 6:46 PM, snoop1130 said:

More than half of typical household debt is good debt, including home loans and business loans.

And if your business is going down the pan you could say it's 100% bad debt.

They try to put a spin on the ridiculous.

"good debt, as people acquired loans to improve their quality of life".

 

What a crock of sh|t - utter nonsense uttered by someone who appears determined to single-handedly demonstrate that the average IQ of Thais (90) is thoroughly well-deserved and if at all, is considerably over-estimated - a lamentable state of affairs for the 21stC' one that has been deliberate and hard-won by successive regimes

 

On 3/8/2021 at 9:07 PM, Taswegian23 said:

"More than half of Thailand’s household debt is good debt, as people acquired loans to improve their quality of life".

 

Good grief. The idiocy of these louts surpasseth my understanding, I'm just about fed up with their mealy-mouthed platitudes pretending that we aren't wading through knee-deep <deleted> every day.

 

I'm just about disgusted with Thais and I didn't start out with any great admiration for their intellect.

There is no such thing as GOOD DEBT!  Debt is debt. Many never recover. Only buy what one can afford simply put.

1 minute ago, nervona81732 said:

There is no such thing as GOOD DEBT!  Debt is debt. Many never recover. Only buy what one can afford simply put.

Far from true.....debt is an unavoidable consequence of investing for the future......invested wisely it makes you a fortune......or unwisely and it bankrupts you...

Where is this man in the Galaxy? FPO?

In the last 3 days, more families are moving out of their homes, and living in with relatives in a futile attempt to make they're mortgage payments. HOW? by renting out their homes they lived in just days before. 

Some are actually in a chain of additional landlords in less homes doing the same exact attempt to keep their property.

They are renting their own homes out with personal items and debris laying over the properties in desperation that the banks will not foreclose on the property.

 

Good Debt is bad debt. 

....and its going to get much worse for the hard working people of Thailand. 

 

 

5 hours ago, nervona81732 said:

There is no such thing as GOOD DEBT!  Debt is debt. Many never recover. Only buy what one can afford simply put.

Agreed. I suspect this layabout was following the economist principle that certain kinds of debt are good (from the banking point of view). I'm with you though, if I don't have the money I don't buy the merch. I certainly don't borrow to buy.

Good debt my left foot. Keep the impecunious indebted and keep them in handcuffs is more like it. Now that's something the Thai pooyays know quite a lot about, especially the Sino-Thais

I did hear (but cannot vouch for it) that the beloved leader was worth 100+ mililon when he became the dear leader, now he's worth over a billion. No good debt for him then... not much hard work or thrift either...

 

 

On 3/8/2021 at 6:46 PM, snoop1130 said:

Finance Ministry: Most household debt is good debt

What a Goose ,there's No good Debt ,Especially now when people are struggling from this Covid by losing jobs or work hours cut.

Khun Wuttipong is referring to the technical meanings of good and bad debt as defined in sources like Investopedia.com. He is not talking about good vs. evil.  He said, "More than half of Thailand’s household debt is good debt, as people acquired loans to improve their quality of life. "

Briefly, the definitions are:

• Good debt "... has the potential to increase your net worth or enhance your life in an important way."  For example, loans to increase education, start or improve a business, home improvement etc. 
• "Bad debt involves borrowing money to purchase rapidly depreciating assets or only for the purpose of consumption." Examples are auto loans (because the car value depreciates), 

On 3/8/2021 at 6:46 PM, snoop1130 said:

The figure was calculated using the country’s GDP growth rate in 2020, a negative 6.1 percent.

Negative 6.1% GDP growth is only a make believe figure.

The true one is about 15%

Sadly, the mantra that debt and inflation are both desirable has gone global. 

The Golden Rule of economic prosperity has always been and will remain true :

Produce more than you consume. 

Business debt in limited amounts may achieve this over time but household debt seldom does so. The whole world is drowning in debt, private and public and corporate. This will not end well. 

20 hours ago, Isaan sailor said:

I believe they refer to good debt as a secured loan, versus bad debt—an unsecured loan.

That makes sense, thanks!

How is a business loan household debt?