Thai Household Debt

[chiang mai]

I don't have time to read to read all pages so i can only hope that someone has already mentioned how black markets operate on a national scale and how our understanding of western economics do not apply to a country that for most part does not pay tax.

"The department targeted 1.98 trillion baht for the fiscal year ending Sept 30".

http://www.bdo-thait...n-the-news/4335

Now do yourself a favour and find the corresponding figures for the UK and see how they compare as a ratio of tax collected vs population (in the context of GDP of course), you may be surprised.

Here's the raw data, maybe sombody can figure out the comparative ratio before I get back from the gym:

UK GDP = $2.43 trill

TH GDP = $346 bill

Population UK = 62.6 mill

Population Thai = 69.5 mill

Tax collected UK = 466,634 mill (2011)

Tax collected TH = 1.98 trill.

Edited October 24, 2012 by chiang mai

[chiang mai]

OK, here's my calculation:

Purchasing Power Parity (PPP) is GDP divided by population, that gives GDP per person UK = $36,600 and Thailand = $9,500.

Revenue per person (Revenue divided by population) gives us UK = GBP 7,454 and Thai = 570

So, Thai GDP is only a quarter of UK GDP where UK collects tax at a rate that is twelve times higher than in Thailand.

(I'll be grateful for any mathmaticians in our midst who can express the above more eloquently).

If you adjust the GDP figures to balance the calculation it looks like Thai's pay tax at a volume rate that is about 70% of the UK rate, not bad really given the rural mix and lack of sophistictaed reporting and collection here.

[nong38]

My ex-wife traded in a fully paid for Toyota Wish, took the house chanote to the local loan shark and bought a new shiny Toyota Camry.

She couldn't pay the loan shark back and lost the house to him.

Where is the logic? the sense in that?

Last I heard the two remaining houses which were paying 70k per month in rental income have been lost to the loan shark as well.

Apparently it is all my fault too.

THe mistake was the Toyota Wish, should got a Honda Accord!

[nong38]

The post from TUKY illustrates the Thai mindset how they cannot get things into perspective, now we can live in the car maybe.

I have heard of many people who have gone to the bank to get a loan against the house and I also know they have no chance to get the repayments back to the bank when all they do is a bit of cooking from a roadside stall, eventually they end up getting more from the bank and the bank get the house and they dont seem to see it coming.

Where I am I know the loaner's in the area, they call at many places all over town, collection is a full time job! The loaners know each other but I suspect dont discuss clients so when a loan is required the loaner will asses how much the client can repay daily based on his observations of trade. Often I see the same trader getting visits from more than one loaner. A rejig or day of reckoning has to come of course, you cannot go on robbing Peter to pay Paul. Some just moonlight, some loose possession or property but twice a month people find money to a buy a ticket to heaven hoping that all their dreams will come true and all their nightmares will be gone ( yes its the excellent Government lottery with super prizes and expensive tkts!)

Long term planning, financial planning is not a Thai trait.

Now what we need is a new car for the weekend!!

Edited October 25, 2012 by nong38

[NeverSure]

name='inthepink

name='NeverSure

Why? Westerners have mortgages which tend to be, say, 30% of gross monthly income. That list merely says that if someone in the US makes $US100,000 per year, he has a total debt of $130,000. That would be house, cars - whatever. Western banks don't engage in usury the way Thai banks do either. You get quoted an interest rate and that's all you pay. At least in the US, it is illegal for a bank to refuse early payoff without penalty. You pay interest for the total dollar days only.

Now, at today's interest rates, if he had a $100,000 mortgage, the payments would be just maybe $1,000 a month including taxes and insurance, leaving him at least $7,000 a month to live on! If he also had $30,000 in car loans, the payments would be maybe $500 a month total. Now the poor fool has only maybe $6,500 left!!!!!

How many Thais have $US6,500 left after housing and transportation?

Oh, and the Westerner's cell phone bill, as a percentage of his income is so low it's off the radar.

That is a classic list of apples and oranges.

--------------------------------------

You make some reasonable points in your earlier posts but with this one you are just picking random (and unrealistic) figures out of the air to justify your point of view.

They are random but I never said they were average. I said if. And it's more common for a household to have that kind of money than some realize. The average doesn't speak to the whole.

The average annual salary in the US is nowhere near $100,000

Didn't intend to imply and didn't say it was average. I was more thinking that it was far more common in the US than LOS. A married couple, both public school teachers can make a lot more than that in a lot of places, plus bennies. A garbage truck driver in NYC makes $130k plus bennies. They just finished a strike for it. I'm only saying it's not rare.

in fact it is less than half that. Furthermore, somebody with a salary of 100k a year is more likely to have a mortgage of around 4-500k, not 100k, so your calculations are largely irrelevant.

Or they might own it free and clear or somewhere in between. Everyone doesn't just throw money around.

Your earlier comments about banks in the US demanding 20% down and performing credit checks before approving mortgages makes the whole industry sound eminently respectable and beyond reproach but neatly glosses over the whole sub-prime mortgage mess which originated in the US and spread economic gloom across the globe a few short years ago. They were not always this responsible.

I didn't say it to make anyone sound anything. I said it because that's the way it is. It's especially true if you want the very best interest rate.

I agree that there are relatively few Thai people who have a monthly disposable income after housing and transportation of $6,500 but to make out that the average man in the street in the USA has this amount of cash on the hip is completely misleading - it just isn't the case. The majority of Americans do not even earn a gross salary of $6,500 a month, let alone have that much to spend after basic expenses and taxes are paid.

I never intended to imply it was average; I just meant it's very possible but not likely in LOS. I know a hell of a lot of people who make that much money.

I never meant to start an argument. Cut my numbers in half or down to a fourth. It still makes a point about the disposable income after a car and cell phone or whatever between the West and LOS. Others above me are telling of people losing property by buying a new car on a whim. I've never seen that one.

Peace.

Edited October 25, 2012 by NeverSure

[chiang mai]

Here's a great tool for those folks that are interested in economics and comparisons:

http://www.indexmundi.com/g/g.aspx?v=143&c=th&l=en

[Heng]

One's opinion of debt anywhere will be largely influenced by who they associate with. Most of the folks I know practice or tend towards the more Confucian 'hiding of wealth' whereas you'll see a large number of folks who tend towards the complete opposite. And then you have a bunch of tourists who aren't able to reliably identify either group, usually extrapolating from the few dozen locals that they happen to be tied to.

[chiang mai]

One's opinion of debt anywhere will be largely influenced by who they associate with. Most of the folks I know practice or tend towards the more Confucian 'hiding of wealth' whereas you'll see a large number of folks who tend towards the complete opposite. And then you have a bunch of tourists who aren't able to reliably identify either group, usually extrapolating from the few dozen locals that they happen to be tied to.

I only agree if the need is to look at the macro level, the helicopter view requires very little first hand knowledge of the people in order to determine the extent to which household debt is a problem or otherwise and the scale of it.

[Heng]

One's opinion of debt anywhere will be largely influenced by who they associate with. Most of the folks I know practice or tend towards the more Confucian 'hiding of wealth' whereas you'll see a large number of folks who tend towards the complete opposite. And then you have a bunch of tourists who aren't able to reliably identify either group, usually extrapolating from the few dozen locals that they happen to be tied to.

I only agree if the need is to look at the macro level, the helicopter view requires very little first hand knowledge of the people in order to determine the extent to which household debt is a problem or otherwise and the scale of it.

The helicopter view doesn't examine anyone's household books, physical title deeds nor equity, nor anything that isn't readily visible from the helicopter.

[chiang mai]

One's opinion of debt anywhere will be largely influenced by who they associate with. Most of the folks I know practice or tend towards the more Confucian 'hiding of wealth' whereas you'll see a large number of folks who tend towards the complete opposite. And then you have a bunch of tourists who aren't able to reliably identify either group, usually extrapolating from the few dozen locals that they happen to be tied to.

I only agree if the need is to look at the macro level, the helicopter view requires very little first hand knowledge of the people in order to determine the extent to which household debt is a problem or otherwise and the scale of it.

The helicopter view doesn't examine anyone's household books, physical title deeds nor equity, nor anything that isn't readily visible from the helicopter.

Let's not forget the origional question,

" It would be very interesting to see an honest study analyzing exactly how much the average middle class Thai person spends every month paying off loans used to buy all of these shiny new things. I'd also imagine that the typical Thai household is up to their eyeballs in debt".

That question can't be answered by looking at houshold books and title deeds unless you look at everybody's, an imposible task of course. But it is spossible to look at the problem from a higher level and draw some conclusions, e.g. is there massive debt out there, is the debt being serviced or is there large scale default, is the percentage of debt out of line, the high level answers being no, yes and no respectively. You'll forgive me but looking at the odd housebook etc will only tell you what mr and mrs somchai are doing, not the country as a whole.

[Heng]

One's opinion of debt anywhere will be largely influenced by who they associate with. Most of the folks I know practice or tend towards the more Confucian 'hiding of wealth' whereas you'll see a large number of folks who tend towards the complete opposite. And then you have a bunch of tourists who aren't able to reliably identify either group, usually extrapolating from the few dozen locals that they happen to be tied to.

I only agree if the need is to look at the macro level, the helicopter view requires very little first hand knowledge of the people in order to determine the extent to which household debt is a problem or otherwise and the scale of it.

The helicopter view doesn't examine anyone's household books, physical title deeds nor equity, nor anything that isn't readily visible from the helicopter.

Let's not forget the origional question,

" It would be very interesting to see an honest study analyzing exactly how much the average middle class Thai person spends every month paying off loans used to buy all of these shiny new things. I'd also imagine that the typical Thai household is up to their eyeballs in debt".

That question can't be answered by looking at houshold books and title deeds unless you look at everybody's, an imposible task of course. But it is spossible to look at the problem from a higher level and draw some conclusions, e.g. is there massive debt out there, is the debt being serviced or is there large scale default, is the percentage of debt out of line, the high level answers being no, yes and no respectively. You'll forgive me but looking at the odd housebook etc will only tell you what mr and mrs somchai are doing, not the country as a whole.

Actually all it does is encourage more 'imagining' as per the original post. The helicopter view is no more informative than the original poster's assumption after observation of superficial consumer habits. No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

[chiang mai]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmundi.com/g/g.aspx?v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

[BigJohnnyBKK]

Let's not forget the origional question,

" It would be very interesting to see an honest study analyzing exactly how much the average middle class Thai person spends every month paying off loans used to buy all of these shiny new things. I'd also imagine that the typical Thai household is up to their eyeballs in debt".

That question can't be answered by looking at houshold books and title deeds unless you look at everybody's, an imposible task of course. But it is spossible to look at the problem from a higher level and draw some conclusions, e.g. is there massive debt out there, is the debt being serviced or is there large scale default, is the percentage of debt out of line, the high level answers being no, yes and no respectively. You'll forgive me but looking at the odd housebook etc will only tell you what mr and mrs somchai are doing, not the country as a whole.

Not to mention the fact that the middle class here is so small as to be relatively unimportant.

Plus that how you define the family unit - Mum and Dad (or uncle/cousin whatever) guaranteeing the condo mortgage, who's debt is it really?

In my experience once you get past the vast majority of Thais who are living paycheck to paycheck struggling just to buy their next high-fat snack, the average debt load would be much lower than it is back home, and much more likely to get paid back long-term.

Home in my case being the US.

[Huayrat]

My mother in law had a 40k baht debt so instead of selling buffallo she goes and gets a loan against her old pick up of 60k.. After interest she is now paying 75k.. Dumb and Dumber

[Fuschia]

Never forget the dark side of the economy here .

i

[nong38]

Doing the smile I know your figures? Do I know yours? How can you know a Thais? They always smile but what is behind the smile? We will never know. From what I have observed since I have been here it can hide a lot. I f you are a non THai( dont like FARANG much) you may be viewed as the MESSIAH to make the smiles become a reality! Up to you.

When I first came I wanted to know what the debt was and was it doable. I dont do debt, now we dont do debt, we sleep at night.

I think a lot of Thais sleep and hope, there is not a knock on the door?!

Its not much different to where we come from is it? We just need to control it from now on, we cannot control what we do not control so dont worry about that just make sure you dont get sucked into a black hole that you cannot get out of, there are plenty out there waiting for your help.

Edited October 25, 2012 by nong38

[chiang mai]

Not to mention the fact that the middle class here is so small as to be relatively unimportant.

Plus that how you define the family unit - Mum and Dad (or uncle/cousin whatever) guaranteeing the condo mortgage, who's debt is it really?

In my experience once you get past the vast majority of Thais who are living paycheck to paycheck struggling just to buy their next high-fat snack, the average debt load would be much lower than it is back home, and much more likely to get paid back long-term.

Home in my case being the US.

No, it's the exact opposite, the Thai middle class is significant:

Thai middle-class

Although in the West, businessmen get excited about a so-called “upcoming middle-class” in emerging economies, it would be wise to determine first how to define this middle-class. A middle-class is only realistically measured by free-disposable income and purchasing power. In, for example, Indonesia, where salaries are low and the cost of living high, there is no middle-class to speak of, with enough free-disposable income and true purchasing power. In Thailand, on the other hand, there is a large middle-income group with a substantial percentage of its income freely available for purchases. (Read also BTA Report: Middle-class living conditions of 2008).

http://businesstrendsasia.blogspot.com/2012/03/thailand-great-alternative-to-china.html

Google, "Middle Class in Thailand" and read some of the articles from that newspaper that we are not permitted to link or quote from, there's a bunch o data out there.

[Heng]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmund...v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

As mentioned, I didn't say there were no facts mentioned. What I said was it seems like many people are merely guessing. (and likely from negative personal experience or negative bias)

[Heng]

Not to mention the fact that the middle class here is so small as to be relatively unimportant.

Plus that how you define the family unit - Mum and Dad (or uncle/cousin whatever) guaranteeing the condo mortgage, who's debt is it really?

In my experience once you get past the vast majority of Thais who are living paycheck to paycheck struggling just to buy their next high-fat snack, the average debt load would be much lower than it is back home, and much more likely to get paid back long-term.

Home in my case being the US.

No, it's the exact opposite, the Thai middle class is significant:

Thai middle-class

Although in the West, businessmen get excited about a so-called “upcoming middle-class” in emerging economies, it would be wise to determine first how to define this middle-class. A middle-class is only realistically measured by free-disposable income and purchasing power. In, for example, Indonesia, where salaries are low and the cost of living high, there is no middle-class to speak of, with enough free-disposable income and true purchasing power. In Thailand, on the other hand, there is a large middle-income group with a substantial percentage of its income freely available for purchases. (Read also BTA Report: Middle-class living conditions of 2008).

http://businesstrend...e-to-china.html

Google, "Middle Class in Thailand" and read some of the articles from that newspaper that we are not permitted to link or quote from, there's a bunch o data out there.

Yeah, that's one of those personal contact / personal experience issues. People are mostly in contact with one group or the other and then assume that the whole class/group/segment is one way or the other.

[chiang mai]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmund...v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

As mentioned, I didn't say there were no facts mentioned. What I said was it seems like many people are merely guessing. (and likely from negative personal experience or negative bias)

On that point I agree, apologies if I misunderstood.

It's true that most posters prefer to make drive by throw away comments then dissappear, their comments come from a basic model in their heads that suggests Thailand is a third world country so there's not much that can be right with the place. It's a lot harder to stop and think about the different aspects and to look objectively at the data and change your opinion, that of course takes an open mind and effort, something which many posters find hard to come by!

[StreetCowboy]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmund...v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

Or perhaps that NPLs are systematically under-reported, in order to boost the balance sheets of the banks.

A prudent investor would check whether the evidence of his own eyes, the word on the street, matched the banks' figures. They'd do their own risk assessments, they'd run their own calculations.

I personally don't have an opinion on the matter, but it pays to admit the possibility of alternatives

SC

[farang000999]

this is being over complicated. the "big picture" in global macroeconomics is whether the debt and aging population/entitlement problems of the West and Japan can be dealt with via currency debasement w/o price inflation getting out of hand as it did in the 1970-1980s period while also avoiding the calls of the masochists to balance budgets immediately which we have seen plenty of from Europe, the USA and Japan. Well, in the USA they have not gotten beyond rhetoric but they are still in the political scene and now have a very big say in the Republican party and the mainstream Republicans who play ball with the Democrats will see their positions challenged in primaries by the Tea party faction of the Republican party if they support fiscal stimulus. it is possible that Thailand could suffer a demise while the the rest of the world moves forward but it is much more likely that if there is a demise to the Thai economy it will be the result of a domino effect that takes the global asset bubble down with it. nothing will untouched.

one of the problems now is that the deficit hawks in usa and europe have made sure to keep all fiscal stimulus small which has rendered it not overly effective thus giving ammunition for the hawks to say "See, they printed money and look how terrible the economy remains" and the frustrated populous eventually gives in and moves to the side of the hawks hoping that something will work and we know through overwhelming historic data that attempts to budget/cut government spending in an enviroment like this will cause massive global pain.

Edited October 25, 2012 by farang000999

[chiang mai]

this is being over complicated. the "big picture" in global macroeconomics is whether the debt and aging population/entitlement problems of the West and Japan can be dealt with via currency debasement w/o price inflation getting out of hand as it did in the 1970-1980s period while also avoiding the calls of the masochists to balance budgets immediately which we have seen plenty of from Europe, the USA and Japan. Well, in the USA they have not gotten beyond rhetoric but they are still in the political scene and now have a very big say in the Republican party and the mainstream Republicans who play ball with the Democrats will see their positions challenged in primaries by the Tea party faction of the Republican party if they support fiscal stimulus. it is possible that Thailand could suffer a demise while the the rest of the world moves forward but it is much more likely that if there is a demise to the Thai economy it will be the result of a domino effect that takes the global asset bubble down with it. nothing will untouched.

one of the problems now is that the deficit hawks in usa and europe have made sure to keep all fiscal stimulus small which has rendered it not overly effective thus giving ammunition for the hawks to say "See, they printed money and look how terrible the economy remains" and the frustrated populous eventually gives in and moves to the side of the hawks hoping that something will work and we know through overwhelming historic data that attempts to budget/cut government spending in an enviroment like this will cause massive global pain.

This is debate about Thailand's household debt and is not meant to be US centric!

[n0mad]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmund...v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

It is amazing to think that the loan ratio can increase so much while the NPL percentage decreases, however 2 comments i'd like to make;

1. NPL is a lagging statistic no one takes out a loan and defaults immediately, obviously there has been a large increase in debt to say it's being handled well is a little premature. NPL at 1 point in the US was looking good too before the stats caught up and the subprime collapse began.

2. Central banks do not always print the real picture rather they often photo shop it to look the way they want for many reasons. it's always good where possible to look at data from other independent sources if available. if none available just be aware, we all know the info coming out of China and the US cannot always be trusted same can be said other countries. I'd personally put Thailand in a similar case and look for verification else where before i put economic stats coming out of the BoT or the government at face value.

that's just my opinion based on what i have observed in Thailand from an outside view and as an insider to my wife's family.

[chiang mai]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmund...v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

It is amazing to think that the loan ratio can increase so much while the NPL percentage decreases, however 2 comments i'd like to make;

1. NPL is a lagging statistic no one takes out a loan and defaults immediately, obviously there has been a large increase in debt to say it's being handled well is a little premature. NPL at 1 point in the US was looking good too before the stats caught up and the subprime collapse began.

2. Central banks do not always print the real picture rather they often photo shop it to look the way they want for many reasons. it's always good where possible to look at data from other independent sources if available. if none available just be aware, we all know the info coming out of China and the US cannot always be trusted same can be said other countries. I'd personally put Thailand in a similar case and look for verification else where before i put economic stats coming out of the BoT or the government at face value.

that's just my opinion based on what i have observed in Thailand from an outside view and as an insider to my wife's family.

Absolutely agree, but even being a lagging indicator I would have expected higher NPL's when the ration was at 76%. As you say however there may well be some smoke and mirrors invoved here and that scares me. My hands on experience of rural folks also suggests that many are borrowing, more than ever before and that the source of funds is varied. Village funds have been topped up and village headmen told they must lend the money; cash rich farangs married to Thai girls and living in rural villages, hanging out their sign saying, "borrow from me", one I know of is actively trying to accumulate a portfolio of land and houses, previously used as collateral. Mrs CM, despite being sworn to never borrow again, has got herself in debt again and is playing that old trick of borrowing from a third party in order to pay off the village fund loan so that she can borrow from it again! Mrs CM has told her she's on her own if she goes down that road, no bail out will be forthcomming, even if it means repo, good girl.

Edited October 26, 2012 by chiang mai

[chiangmaikelly]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmund...v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

It is amazing to think that the loan ratio can increase so much while the NPL percentage decreases, however 2 comments i'd like to make;

1. NPL is a lagging statistic no one takes out a loan and defaults immediately, obviously there has been a large increase in debt to say it's being handled well is a little premature. NPL at 1 point in the US was looking good too before the stats caught up and the subprime collapse began.

2. Central banks do not always print the real picture rather they often photo shop it to look the way they want for many reasons. it's always good where possible to look at data from other independent sources if available. if none available just be aware, we all know the info coming out of China and the US cannot always be trusted same can be said other countries. I'd personally put Thailand in a similar case and look for verification else where before i put economic stats coming out of the BoT or the government at face value.

that's just my opinion based on what i have observed in Thailand from an outside view and as an insider to my wife's family.

So what you are saying is we should trust your opinion above the BOT, Chinese government and the USA based on what you have observed in Thailand from an outside view and as an insider to your wife's family.

Because you wrote, " Central banks do not always print the real picture rather they often photo shop it to look the way they want for many reasons. it's always good where possible to look at data from other independent sources if available. if none available just be aware, we all know the info coming out of China and the US cannot always be trusted same can be said other countries. I'd personally put Thailand in a similar case and look for verification else where before i put economic stats coming out of the BoT or the government at face value."

[chiang mai]

Heng is absolutely right to suggest that any Central Bank figures should be viewed with some degree of suspicion, more often it's a problem with what they don't say rather than what they do say, BOE is a classic example. On that basis I would view BOT numbers with more than just a grain of salt.

[BigJohnnyBKK]

> Not to mention the fact that the middle class here is so small as to be relatively unimportant.

No, it's the exact opposite, the Thai middle class is significant:

Thai middle-class

Although in the West, businessmen get excited about a so-called “upcoming middle-class” in emerging economies, it would be wise to determine first how to define this middle-class. A middle-class is only realistically measured by free-disposable income and purchasing power. In, for example, Indonesia, where salaries are low and the cost of living high, there is no middle-class to speak of, with enough free-disposable income and true purchasing power. In Thailand, on the other hand, there is a large middle-income group with a substantial percentage of its income freely available for purchases. (Read also BTA Report: Middle-class living conditions of 2008).

http://businesstrend...e-to-china.html

Google, "Middle Class in Thailand" and read some of the articles from that newspaper that we are not permitted to link or quote from, there's a bunch o data out there.

Yeah, that's one of those personal contact / personal experience issues. People are mostly in contact with one group or the other and then assume that the whole class/group/segment is one way or the other.

Well no one person is going to have a truly representative sampling of personal acquaintances.

Looking at both median and average income/asset statistics, I would continue to assert that the middle class, although certainly increasing in numbers and significance in recent decades, is not that significant a driver of macro-economic statistics.

I would argue that the borrowing/repayment patters of both the population sliver at the top that controls nearly all the significant assets of the country, and the huge majority that is still hand-to-mouth are still both much more significant than the middle.

Of course the latter group doesn't participate at all in the formal debt industry, so I guess wrt the NPL issue I see the middle class as the tail that won't wag the dog.

But even to the extent the middle class is important in such measurements, I see them as much more financially responsible than consumers in the West.

Much.

Edited October 26, 2012 by BigJohnnyBKK

[n0mad]

No doubt there is debt out there, but most of the 'data' or 'facts' discussed so far have mostly been guesses.

Yet again I don't agree:

bank loans as a ratio of savings from 76% to 119% is fact, per BOT and Asian Banker;

non performing loans down to 2.5% of total loan book, fact per BOT;

GDP at $346 bill, fact as previously stated;

tax collected at 2 trill baht, ditto;

From the above and from other dtata at http://www.indexmund...v=143&c=th&l=en it's easily possible to piece together a fairly accurate picture of what's happening in the financial retail sector, I mean NPL at 2.5% speaks volumes, mostly that the population is managing the debt well.

It is amazing to think that the loan ratio can increase so much while the NPL percentage decreases, however 2 comments i'd like to make;

1. NPL is a lagging statistic no one takes out a loan and defaults immediately, obviously there has been a large increase in debt to say it's being handled well is a little premature. NPL at 1 point in the US was looking good too before the stats caught up and the subprime collapse began.

2. Central banks do not always print the real picture rather they often photo shop it to look the way they want for many reasons. it's always good where possible to look at data from other independent sources if available. if none available just be aware, we all know the info coming out of China and the US cannot always be trusted same can be said other countries. I'd personally put Thailand in a similar case and look for verification else where before i put economic stats coming out of the BoT or the government at face value.

that's just my opinion based on what i have observed in Thailand from an outside view and as an insider to my wife's family.

So what you are saying is we should trust your opinion above the BOT, Chinese government and the USA based on what you have observed in Thailand from an outside view and as an insider to your wife's family.

Because you wrote, " Central banks do not always print the real picture rather they often photo shop it to look the way they want for many reasons. it's always good where possible to look at data from other independent sources if available. if none available just be aware, we all know the info coming out of China and the US cannot always be trusted same can be said other countries. I'd personally put Thailand in a similar case and look for verification else where before i put economic stats coming out of the BoT or the government at face value."

wow nice troll there,

firstly, where did i say trust me? Secondly, if i did not in fact say trust me please direct me to where i implied you should trust me based on 2 "comments". The fact i point out never to trust just 1 source obviously escaped you. perhaps next time i'll dumb it down a little.

for your better understanding, believe what you want to believe that is spewed out by governments and central banks. Don't be surprised if the information they spew out is wrong, under-stated, over-stated or later revised as history has shown is often done (lets not forget the figure being released by the government on its rice pledging scheme). It is always more accurate to get similar information from multiple sources to confirm validity.

if you need me to simplify it further let me know.

if anyone is stupid enough to believe everything they read in this day and age well they deserve to get burned at some point.

[chiang mai]

Sorry, #148 should read Nomad not Heng!