Thailand’s soaring household debt risks economic slowdown, warns NESDC

[snoop1130]

Image via Flickr

 

The National Economic and Social Development Council (NESDC) issued a warning concerning Thailand’s mounting household debt, stating that it could become a significant issue if the economy and employment rates decline. NESDC Secretary-General Danucha Pichayanan emphasised the need for debt restructuring alongside financial and fiscal discipline at both individual and corporate levels.

 

During a press conference discussing the economic outlook for the first quarter of 2023, Danucha highlighted that household debt had reached 15.09 trillion baht in the fourth quarter of 2022, a 3.5% increase compared to the same period in 2021, and accounting for 86.9% of GDP. Most of the growth in household debt resulted from real estate purchases, which grew by 5.2% in the fourth quarter of 2022. Personal loans have also continued to grow at an increasing rate of 20.8% over the last two quarters. However, non-performing loans relating to household debt remain stable at 2.62%.

 

In the first quarter of 2023, the number of employed individuals was 39.6 million, a 2.4% increase from the same quarter in the previous year, with average monthly wages of 15,118 baht in the public sector and 13,762 baht in the private sector, excluding other benefits. The unemployment rate currently stands at 1.05%.

 

Danucha also discussed the potential impact of raising the minimum wage, as desired by the General Election winners. While it would enable workers to earn more, it would also increase production costs, leading to higher product prices. Furthermore, foreign direct investment could be affected, as foreign investors may shift their production bases from Thailand to other countries if the wage hike pledge is implemented. Danucha said…

 

“Personally, I think labour wages should not be set equally across the country as the cost of living differs in each area.”

 

Full Story: https://thethaiger.com/news/business/thailands-soaring-household-debt-risks-economic-slowdown-warns-nesdc

 

-- © Copyright Thaiger 2023-05-23

 

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[BangkokReady]

Time for a subsidy...

[Venom]

But consumer confidence is up! 

[hotchilli]

Almost every Thai I know is up to the eyeballs in debt.

[mikebell]

13 hours ago, snoop1130 said:

a significant issue if the economy and employment rates decline

Why would employment rates decline?  It has remained at a fictitious 98+% for years.

[RichardColeman]

Not just Thailand - USA currently has more credit card debt than ever, and the current USA debt per household is about $250,000 per tax payer !

 

Sure world wide debt would reduce 95% is people were told they could not buy any non essentials for a time whilst in debt.