Thailand’s household debt in Q1 at 90.5% of GDP and increasing – BoT

[snoop1130]

Photo created by lifeforstock – www.freepik.com

 

Thailand’s household debt, for the first quarter of this year, soared to 14.1 trillion baht, accounting for 90.5% of gross domestic product (GDP), and is increasing due to a fall in incomes and increasing debt, according to Bank of Thailand (BoT) Assistant Governmor Thanyanit Niyomkarn.

 

Thanyanit said that 34% of household debt is housing related, while credit cards account for 28%, adding that personal loans, including credit cards, has become more complicated because a debtor may have several creditors simultaneously, many of which are out of the control of the central bank.

 

She said, however, that the central bank has been trying to address the household debt problem in several ways, including educating people about how not to get into too much debt, rolling out measures to regulate creditors and mechanisms to help debtors, such as the lowering of the interest rate ceiling for credit cards and personal loans, as well as debt refinancing.

 

Full Story: https://www.thaipbsworld.com/thailands-household-debt-in-q1-at-90-5-of-gdp-and-increasing-bot/

 

-- © Copyright Thai PBS 2021-07-21

 

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[WineOh]

1 hour ago, snoop1130 said:

She said, however, that the central bank has been trying to address the household debt problem in several ways, including educating people about how not to get into too much debt

lol, good luck with that one.

 

They have smartphones to buy, don't you know!

Edited July 21, 2021 by WineOh

[RotBenz8888]

1 hour ago, snoop1130 said:

educating people about how not to get into too much debt

That's a challenge even greater than educating Thais about safe driving. 

[Pattaya Spotter]

It's almost as if Thailand was an advanced development world economy.

[nkg]

"Household Debt" is a sometimes misleading term. Current UK household debt is 123% of total household income, a huge amount, but approximately 90% of this relates to mortgages and equity release against properties.

 

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddebtingreatbritain/april2016tomarch2018

 

Thailand's household debt seems to have a much smaller property component, and that's worrying.

 

 

Edited July 21, 2021 by nkg

[RichardColeman]

Thailand Household debt has gone up 11% ish in a year. Be over 100% in less than 1 more at this rate. I'm actually surprised it's only gone up only 1% in the qtr, it's been rising at near 3% a qtr. Maybe the banks are saying no to lines of credit ? 

 

[greeneking]

4 hours ago, WineOh said:

lol, good luck with that one.

 

They have smartphones to buy, don't you know!

And their job is gone or only being paid 50% salary.  And they can not go without food for too many days even if it helps the children eat.  And there is no-one left they can ask to help them anymore because all their friends and family have reached the same situation.

Get off the bar-stool and look around you....

[Soikhaonoiken]

No surprise here,  what did they expect with all the people loosing there jobs. 

[RichardColeman]

6 hours ago, WineOh said:

They have smartphones to buy, don't you know!

Maybe that's why they are shutting all the shops - reduce Thai spending by closing everything ? 

[kynikoi]

Well, they could force the robber banks to halve interest rates to 12%.

 

Force banks to reduce principal.

 

Nah...

[XtraFly]

3 hours ago, nkg said:

"Household Debt" is a sometimes misleading term. Current UK household debt is 123% of total household income, a huge amount, but approximately 90% of this relates to mortgages and equity release against properties.

 

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddebtingreatbritain/april2016tomarch2018

 

Thailand's household debt seems to have a much smaller property component, and that's worrying.

 

 

I love how you put it in perspective, for some reason it's easier for me to understand when I put in in comparison with the US or the UK. my concern is government in some developing countries don't step in or offer any subsidies or stimulus checks. once the cash flow cycle is affected everyone can feel the pain from bottom to almost the very top.

[sammieuk1]

Only 99 days to go and everything will be all smiles again ????

[nkg]

4 hours ago, kynikoi said:

Well, they could force the robber banks to halve interest rates to 12%.

 

Force banks to reduce principal.

 

Nah...

 

I think Thailand will need to come up with some new rules regarding unpayable debts over the next few years. Large sums of money owed by people whose livelihoods have been destroyed by covid will never be paid back.

 

There needs to be some mechanisms by which those debts can be discharged, so that productive people whose lives have been wrecked by covid can get back to running businesses and paying taxes. I'm talking about small and medium sized business owners.

[hotchilli]

13 hours ago, snoop1130 said:

She said, however, that the central bank has been trying to address the household debt problem in several ways, including educating people about how not to get into too much debt, rolling out measures to regulate creditors and mechanisms to help debtors, such as the lowering of the interest rate ceiling for credit cards and personal loans, as well as debt refinancing.

Keeping people employed is the answer.... but Prayut has other ideas.

[Cake Monster]

5 hours ago, XtraFly said:

I love how you put it in perspective, for some reason it's easier for me to understand when I put in in comparison with the US or the UK. my concern is government in some developing countries don't step in or offer any subsidies or stimulus checks. once the cash flow cycle is affected everyone can feel the pain from bottom to almost the very top.

It is very worrying that so much debt incurred by Thais is not related to Bricks and Mortar Debt. Only 34 % is related to actual Housing Debt ( Mortgages, Loan security Etc ).

Of course this means that 66 % of Household Debt is on things such as Credit Cards, and things like Car Loans ( a large slice of this debt me thinks )

In the UK, the people have the Salaries and potential to repay their Loans. This is also reinforced by stringent Credit checks and procedures before Loans are issues against anything at all.

Here it just seems so easy to get a 7 Year Loan on a Car or 3 Years on a TV

 

 

[nkg]

25 minutes ago, Cake Monster said:

It is very worrying that so much debt incurred by Thais is not related to Bricks and Mortar Debt. Only 34 % is related to actual Housing Debt ( Mortgages, Loan security Etc ).

Of course this means that 66 % of Household Debt is on things such as Credit Cards, and things like Car Loans ( a large slice of this debt me thinks )

In the UK, the people have the Salaries and potential to repay their Loans. This is also reinforced by stringent Credit checks and procedures before Loans are issues against anything at all.

Here it just seems so easy to get a 7 Year Loan on a Car or 3 Years on a TV

 

 

 

A lot of Thais I know are really struggling to make their car payments. Won't companies repossessing those cars find it difficult to get their money back? Who has the money to buy the repossessed cars?

[Cake Monster]

1 minute ago, nkg said:

 

A lot of Thais I know are really struggling to make their car payments. Won't companies repossessing those cars find it difficult to get their money back? Who has the money to buy the repossessed cars?

The Loan Companies will probably do everything within their power to prevent the Cars being repo,d, for that very reason.

Many people when they cannot afford to keep paying try to sell the Car to a person that is willing to undertake the repayments on the balance outstanding.

This is why so many cars seem to be very highly priced on the second hand Market.

The seller usually wants to sell the car at its value, plus the amount of outstanding finance, plus the " I put on Alloy Wheels Etc "value

[nkg]

3 minutes ago, Cake Monster said:

The Loan Companies will probably do everything within their power to prevent the Cars being repo,d, for that very reason.

Many people when they cannot afford to keep paying try to sell the Car to a person that is willing to undertake the repayments on the balance outstanding.

This is why so many cars seem to be very highly priced on the second hand Market.

The seller usually wants to sell the car at its value, plus the amount of outstanding finance, plus the " I put on Alloy Wheels Etc "value

 

From a farang perspective, there will probably some cheap second-hand cars available. When I was looking at second-hand car prices 5 years ago, the prices seemed ridiculously high.

 

To clarify, I would rather Thai people were able to keep their cars.

[konaboy]

reply to greeneking

 

What bar stool?

[Airalee]

The low mortgage debt shouldn’t be surprising.  With housing so cheap and cars/luxury goods so expensive (compared to the west) it’s no wonder that it skews differently.  
 

With regards to debt restructuring, I suspect it will be very much like it was in the US after the housing bubble popped.  Loans won’t be forgiven but rather extended with balloon payments tacked onto the end with some minor interest rate adjustments thrown in for good measure.  All on a case by case basis of course.

[retsdon]

The China Morning Post has an article today on Thai personal debt. 

https://www.scmp.com/week-asia/economics/article/3141870/coronavirus-batters-thailands-economy-even-bangkok-pawnshops

[candide]

I guess it doesn't include money borrowed from money lenders. The debt situation is likely worse than the official credit statistics.