Thai Household Debt

[TommoPhysicist]

Whether or not people have checking accounts in Thailand is irrelevant, when someone needs a bankers draft or a cashiers cheque for a large purchase, they go to the bank and buy one. But nobody wants to do that when paying UBC etc because the cost does not justify the end, paying 100 baht for a cashiers cheque to pay a THB 1,500 bill is not cost effective.

When I wanted a bankers draft for my UK passport in CM, most banks weren't interested at all.

I had to get the cash out of my bank then go along to a 'foreigner friendly' bank to purchase one.

When I see Thais buying a car (900k) ..... down to the bank get out cash.

When I bought a car/scooter/plasmaTV (150k/54k/26k) ... down to the bank and get cash.

I know a policeman who just bought a house in CM for his mia noi 1.2M, paid 200k a month for 6 months ..... cash, said his wife would notice larger amounts missing from his bank account in one go.

Tried to buy my new scooter from the main Honda dealer in CM, using card or bank draft, they said no, please go and get cash.

Who are these people you know who use a cheque/draft ...... I don't know them or any shop that wants to deal with them. What is your idea of a 'large purchase'?

Edited October 27, 2012 by TommoPhysicist

[fletchsmile]

How do you know anything about Thai debt? .... The fact remains checking accounts are the norm in the West and the exception in Thailand. Why is that?

Just a mere couple of decades in the financial sector in Asia. Believe it or not in addition to actual practice of what financial institutions do, that also includes strategy papers on the banking sector, looking at the non-banked segments, social implications, microfinance, statistical analysis, discussions with Bank of Thailand staff at various levels, etc.

I appreciate that pales into insignificance compared to your experiences, those of your wife and Somchai the motor-cycle taxi driver.

BTW I think you'll find that cheques are no longer the norm in the West either. The UK for example was looking to phase out cheques by the end of this decade. They have been superceded by many other forms of payments... Direct Debitss, STOs, online payments, Credit Cards, Debit Cards not to mention newer forms of electronic payments. Yes people still have current accounts with a cheque book usually thrown in (as is the case in Thailand). Cheques are not that common these days in the west for payments by individuals though. Perhaps in your day they were. All you're highlighting is that again your experience of the West no longer matches the current day norm.

In Thailand, most banks now offer all in one accounts, that link to Savings accounts and automatically sweeps payments, similar to say UK. Your first cheque book is often given free. That there are many other forms of payments, though which is a factor why cheque usage is no longer growing in Thailand. From memory I think there are about 200,000 cheques per day cleared in Thailand. I recall the number of accounts with a cheque facility linked to it was measure by hundreds of thousand alone at the last bank I worked for.

For large payments in millions of dollars cashiers cheques or bank transfers are much more common than cash. Please also don't confuse cashier's cheques with personal cheques.

[chiang mai]

Yes, you would have a problem trying to buy a foriegn currency bankers draft or cashiers cheque I imagine but buying one in THB is an everyday event at all banks. As stated previously, I've bought and sold two properties where cashiers cheques were used solely, one for the deposit and later, one for the balance. When I bought my CRV I gave the GM of the Honda dealership a cashiers cheque for 1.2 mill, as he suggested - when I paid off a car loan for 80k baht, I gave a cashiers cheque and the finance company said thanks! I personally use them for most trasactions over around 100k baht and so do most people I know, for large purchases, people who live in caves however probably don't and may not have even heard of the practise!

[chiangmaikelly]

How do you know anything about Thai debt? .... The fact remains checking accounts are the norm in the West and the exception in Thailand. Why is that?

Just a mere couple of decades in the financial sector in Asia. Believe it or not in addition to actual practice of what financial institutions do, that also includes strategy papers on the banking sector, looking at the non-banked segments, social implications, microfinance, statistical analysis, discussions with Bank of Thailand staff at various levels, etc.I appreciate that pales into insignificance compared to your experiences, those of your wife and Somchai the motor-cycle taxi driver.BTW I think you'll find that cheques are no longer the norm in the West either. The UK for example was looking to phase out cheques by the end of this decade. They have been superceded by many other forms of payments... Direct Debitss, STOs, online payments, Credit Cards, Debit Cards not to mention newer forms of electronic payments. Yes people still have current accounts with a cheque book usually thrown in (as is the case in Thailand). Cheques are not that common these days in the west for payments by individuals though. Perhaps in your day they were. All you're highlighting is that again your experience of the West no longer matches the current day norm.In Thailand, most banks now offer all in one accounts, that link to Savings accounts and automatically sweeps payments, similar to say UK. Your first cheque book is often given free. That there are many other forms of payments, though which is a factor why cheque usage is no longer growing in Thailand. From memory I think there are about 200,000 cheques per day cleared in Thailand. I recall the number of accounts with a cheque facility linked to it was measure by hundreds of thousand alone at the last bank I worked for.For large payments in millions of dollars cashiers cheques or bank transfers are much more common than cash. Please also don't confuse cashier's cheques with personal cheques.

Are you saying that in Thailand there is a bank that gives a free personal check book? Are you saying that 200,000 personal checks are cleared daily in Thailand? I appreciate the lecture but this thread is about household debt in Thailand. Edited October 27, 2012 by chiangmaikelly

[BigJohnnyBKK]

Just a mere couple of decades in the financial sector in Asia. Believe it or not in addition to actual practice of what financial institutions do, that also includes strategy papers on the banking sector, looking at the non-banked segments, social implications, microfinance, statistical analysis, discussions with Bank of Thailand staff at various levels, etc.

So then please answer this - are individual Thais allowed to have checking accounts, or are they only granted to registered businesses?

[chiang mai]

I seem to recall that issuing a cheque in Thailand, without sufficient funds to cover it, is a jailable offence, maybe that's a part of the picture.

[KKvampire]

Most products from cars and motorbikes to smart phones .pads and computers and many brand names are inflated in thailand even by western salaries .so thais must be piling it on the credit card to show off.

Sent from my LG-P350 using Thaivisa Connect App

[chiangmaikelly]

Yes, you would have a problem trying to buy a foriegn currency bankers draft or cashiers cheque I imagine but buying one in THB is an everyday event at all banks. As stated previously, I've bought and sold two properties where cashiers cheques were used solely, one for the deposit and later, one for the balance. When I bought my CRV I gave the GM of the Honda dealership a cashiers cheque for 1.2 mill, as he suggested - when I paid off a car loan for 80k baht, I gave a cashiers cheque and the finance company said thanks! I personally use them for most trasactions over around 100k baht and so do most people I know, for large purchases, people who live in caves however probably don't and may not have even heard of the practise!

I buy cashiers checks at Bank of Bangkok (Pattaya, Rayong, Chiang Mai) with no problem in US dollars any major city will have that service. Normally they even have a desk at the bank with that written on it. My point was that most Thai people pay cash even for large purchases.

[fletchsmile]

How do you know anything about Thai debt? .... The fact remains checking accounts are the norm in the West and the exception in Thailand. Why is that?

Just a mere couple of decades in the financial sector in Asia. Believe it or not in addition to actual practice of what financial institutions do, that also includes strategy papers on the banking sector, looking at the non-banked segments, social implications, microfinance, statistical analysis, discussions with Bank of Thailand staff at various levels, etc.

I appreciate that pales into insignificance compared to your experiences, those of your wife and Somchai the motor-cycle taxi driver.

BTW I think you'll find that cheques are no longer the norm in the West either. The UK for example was looking to phase out cheques by the end of this decade. They have been superceded by many other forms of payments... Direct Debitss, STOs, online payments, Credit Cards, Debit Cards not to mention newer forms of electronic payments. Yes people still have current accounts with a cheque book usually thrown in (as is the case in Thailand). Cheques are not that common these days in the west for payments by individuals though. Perhaps in your day they were. All you're highlighting is that again your experience of the West no longer matches the current day norm.

In Thailand, most banks now offer all in one accounts, that link to Savings accounts and automatically sweeps payments, similar to say UK. Your first cheque book is often given free. That there are many other forms of payments, though which is a factor why cheque usage is no longer growing in Thailand. From memory I think there are about 200,000 cheques per day cleared in Thailand. I recall the number of accounts with a cheque facility linked to it was measure by hundreds of thousand alone at the last bank I worked for.

For large payments in millions of dollars cashiers cheques or bank transfers are much more common than cash. Please also don't confuse cashier's cheques with personal cheques.

Are you saying that in Thailand there is a bank that gives a free personal check book? Are you saying that 200,000 personal checks are cleared daily in Thailand?

I appreciate the lecture but this thread is about household debt.

For personal free personal cheque books, I suggest you Google it. SCB, SCBT, TMB, HSBC (now stopped) etc. It is often a promotion to give the first cheque book free. After that you pay for the cheques.

No I said 200,000 cheques a day cleared daily in Thailand I didn't give a split between personal or business. I also suggested you don't mix these up with cashier's cheques which are common for large value items as they are guaranteed for immediate value compared to business or personal cheques. Look on the BOT's website under payment systems or under statistics and you'll likely get some facts.

BTW Yes I also have plenty of experience of people up country too. The difference though is that unlike you I see the other side of the coin. Heng's numbers earlier 5-15-80 on H/M/L are reasonably accurate. Over 80% of the population are below what we would normally term middle class - i.e 80%+ are poor. Hence even if you think you are seeing a lot of people doing something what you are missing is that those 80% may be by volume, but are not by value. Most of the middle class is in BKK.

So when people see "wealthy Thais" spending in BKK, what they need is the context that this wealth is because most of the high class and middle class are here in Bangkok. Harsh but true is that the rest of the country outside BKK are largely peasants. So their spendings are not necessarily representative of the people you see outside BKK, even in places like Chiang Mai.

Also that wealth is not necessarily earned each month. It has already been accumulated by family/ previous generations. I recall working for a Group of companies one of which was motor vehicles distribution. We paid the receptionist 12k a month. She turned up each day in a Merc - yes and she was Thai Chinese.

[chiang mai]

the rest of the country outside BKK are largely peasants.

Oi!

[chiangmaikelly]

How do you know anything about Thai debt? .... The fact remains checking accounts are the norm in the West and the exception in Thailand. Why is that?

Just a mere couple of decades in the financial sector in Asia. Believe it or not in addition to actual practice of what financial institutions do, that also includes strategy papers on the banking sector, looking at the non-banked segments, social implications, microfinance, statistical analysis, discussions with Bank of Thailand staff at various levels, etc.

I appreciate that pales into insignificance compared to your experiences, those of your wife and Somchai the motor-cycle taxi driver.

BTW I think you'll find that cheques are no longer the norm in the West either. The UK for example was looking to phase out cheques by the end of this decade. They have been superceded by many other forms of payments... Direct Debitss, STOs, online payments, Credit Cards, Debit Cards not to mention newer forms of electronic payments. Yes people still have current accounts with a cheque book usually thrown in (as is the case in Thailand). Cheques are not that common these days in the west for payments by individuals though. Perhaps in your day they were. All you're highlighting is that again your experience of the West no longer matches the current day norm.

In Thailand, most banks now offer all in one accounts, that link to Savings accounts and automatically sweeps payments, similar to say UK. Your first cheque book is often given free. That there are many other forms of payments, though which is a factor why cheque usage is no longer growing in Thailand. From memory I think there are about 200,000 cheques per day cleared in Thailand. I recall the number of accounts with a cheque facility linked to it was measure by hundreds of thousand alone at the last bank I worked for.

For large payments in millions of dollars cashiers cheques or bank transfers are much more common than cash. Please also don't confuse cashier's cheques with personal cheques.

Are you saying that in Thailand there is a bank that gives a free personal check book? Are you saying that 200,000 personal checks are cleared daily in Thailand?

I appreciate the lecture but this thread is about household debt.

For personal free personal cheque books, I suggest you Google it. SCB, SCBT, TMB, HSBC (now stopped) etc. It is often a promotion to give the first cheque book free. After that you pay for the cheques.

No I said 200,000 cheques a day cleared daily in Thailand I didn't give a split between personal or business. I also suggested you don't mix these up with cashier's cheques which are common for large value items as they are guaranteed for immediate value compared to business or personal cheques. Look on the BOT's website under payment systems or under statistics and you'll likely get some facts.

BTW Yes I also have plenty of experience of people up country too. The difference though is that unlike you I see the other side of the coin. Heng's numbers earlier 5-15-80 on H/M/L are reasonably accurate. Over 80% of the population are below what we would normally term middle class - i.e 80%+ are poor. Hence even if you think you are seeing a lot of people doing something what you are missing is that those 80% may be by volume, but are not by value. Most of the middle class is in BKK.

So when people see "wealthy Thais" spending in BKK, what they need is the context that this wealth is because most of the high class and middle class are here in Bangkok. Harsh but true is that the rest of the country outside BKK are largely peasants. So their spendings are not necessarily representative of the people you see outside BKK, even in places like Chiang Mai.

Also that wealth is not necessarily earned each month. It has already been accumulated by family/ previous generations. I recall working for a Group of companies one of which was motor vehicles distribution. We paid the receptionist 12k a month. She turned up each day in a Merc - yes and she was Thai Chinese.

I asked two questions.

Are you saying that in Thailand there is a bank that gives a free personal check book? Are you saying that 200,000 personal checks are cleared daily in Thailand? I'll answer them. No there is not a bank in Thailand that gives a free personal checkbook and of the 200,000 checks cleared daily almost none are personal checks.

[chiangmaikelly]

the rest of the country outside BKK are largely peasants.

Oi!

I'm a peasant too. Do you really expect me to take this guy seriously, not you Chaing Mai.

[nong38]

This is yet another stupid discussion based on the personal experiences of an individual, purporting to be representative of the country and population as a whole, it's ludicrous, of course people use cheques to buy and sell big ticket items, that you don't is something else entirely.

If it was not the norm it would be ludicrous. It also is central to the household debt held by Thai people. Where do you pay your electric bill? 7/11 cash. Where do you pay your water bill? 7/11 cash. How do you pay your satellite bill? Cash. Or 3BB internet? Cash. You can pay everything in Thailand in Cash. How do you know what is the percent of debt when everything in a society can be paid for in Cash? Do you see the problem here?

Do you know anyone who has a checking account in Thailand? I don't know one person. Business sure but individuals none.

Sometimes I really feel like I am the only person who lives in Thailand. Does anyone posting on Thai Visa have a personal checking account from a Thai bank? I would bet less than 1%.

Whether or not people have checking accounts in Thailand is irrelevant, when someone needs a bankers draft or a cashiers cheque for a large purchase, they go to the bank and buy one. But nobody wants to do that when paying UBC etc because the cost does not justify the end, paying 100 baht for a cashiers cheque to pay a THB 1,500 bill is not cost effective.

But you also seem to think that the only way the true cost of household debt can be captured is if everyone were to have a checking account and presumably all transaction monitored in some way, bizzarre to say the least..Looking at Somchai's spending habits is meanigless unless you want to write a detailed report about Somchai's debt, I think what we're interested in is a much higher level view and one that is more representative of the population as a whole, rather than just one person.

Think about it. Why do people not have checking accounts in Thailand? In the West everyone has a checking account and everyone pays bills with checks. Everything is tracked. Everything is recorded. All the information is available. In our quest to discern who pays taxes and how much household debt a family has a checking account would make the accounting far easier. An ex pat can live in Thailand forever and leave no paper trail of any expenditures.

There are many shops, especially the big chains in the UK which no longer take cheques, I have no cheque facility with my UK bank, I dont need it, I have a debit card. The cheque book will soon be consigned to history.

[nong38]

I think there is a missing factor on this debt issue that we are unaware of, if we knew the right question to ask it might all become clearer and I think the answer is so obvious to Thais that they probably dont understand why we dont know!

Most Thais dont deal with Banks in my opinion, they have no account and have no security for a loan, if they want money they go private and pay the going rate. They dont do much financial planning, they dont much forward thinking, they are not used to having much spare cash so when they have some they spend it, like kids in a toy shop! If they have borrowed to have this wonderful experience they would not worry about collection until a few days before it was due, the family might rally round provided they were not all at it, but from what I see mostly Thais are up to the hilt in debt buying things they really can do without but want to have good feelings about the grand purchase.

[chiang mai]

I think there is a missing factor on this debt issue that we are unaware of, if we knew the right question to ask it might all become clearer and I think the answer is so obvious to Thais that they probably dont understand why we dont know!

Most Thais dont deal with Banks in my opinion, they have no account and have no security for a loan, if they want money they go private and pay the going rate. They dont do much financial planning, they dont much forward thinking, they are not used to having much spare cash so when they have some they spend it, like kids in a toy shop! If they have borrowed to have this wonderful experience they would not worry about collection until a few days before it was due, the family might rally round provided they were not all at it, but from what I see mostly Thais are up to the hilt in debt buying things they really can do without but want to have good feelings about the grand purchase.

Most private loans and loan sharks charge rates in excess of 5% per month, banks will lend at somewhere around 7% to 10% per year, of course everyone has bank accounts.

[Farma]

A couple of comments on points raised in this thread.

A person near and dear to me has a personal (not business) cheque account and writes on average 4 or more cheques per week. It's a common method of payment to travelling sales reps as they prefer not to carry large amounts of cash.

During a recent property sale GSB refused to accept a bankers draft from KBank. Both parties had to go back to KBank, explain the problem and ask for cash to complete the property sale. The KBank manager phoned GSB but they still refused to accept the KBank banker draft. Walking between banks with a few million in a paper bag is a little bit scary.

[exeter]

I think there is a missing factor on this debt issue that we are unaware of, if we knew the right question to ask it might all become clearer and I think the answer is so obvious to Thais that they probably dont understand why we dont know!

Most Thais dont deal with Banks in my opinion, they have no account and have no security for a loan, if they want money they go private and pay the going rate. They dont do much financial planning, they dont much forward thinking, they are not used to having much spare cash so when they have some they spend it, like kids in a toy shop! If they have borrowed to have this wonderful experience they would not worry about collection until a few days before it was due, the family might rally round provided they were not all at it, but from what I see mostly Thais are up to the hilt in debt buying things they really can do without but want to have good feelings about the grand purchase.

Most private loans and loan sharks charge rates in excess of 5% per month, banks will lend at somewhere around 7% to 10% per year, of course everyone has bank accounts.

Your figure of 5% is not far short I would suspect and as for the banks, if you have an account you have history, if not you have a chanoot?. In the 1st instance borrowers could be hooked for life unless they get a lucky windfall or there is a significant death in the family, or maybe a wedding!

My g/f used a couple of chappies to borrow funds for a business set up, it was not easy to get the details but it seemed to be a fixed daily rate over 145 days. I asked if he could give you a figure for early repayment ( bit of discount maybe!) well no the number of days left of the 145 x the daily rate 400bts or whatever. Even at the exorbitent rates ( compared to the banks and what we see in the west ) there were no shortage of customers, almost all stall holders were getting visits and if your credit runs out with one man, there will another and another and so it goes on, its a big problem I would think, lots of individuals involved but not what we might call huge sums, but its relative isnt it.

Its the way system works here, like there are no prostitutes, I see non anyway, some nice bar girls though supporting the family.

Edited October 27, 2012 by exeter

[fletchsmile]

Just a mere couple of decades in the financial sector in Asia. Believe it or not in addition to actual practice of what financial institutions do, that also includes strategy papers on the banking sector, looking at the non-banked segments, social implications, microfinance, statistical analysis, discussions with Bank of Thailand staff at various levels, etc.

So then please answer this - are individual Thais allowed to have checking accounts, or are they only granted to registered businesses?

Yes individuals can have checking accounts. I have with 3 different banks in Thailand. As mentioned, each also offers a sweep facility so the balance in the current account is zero, on the rare occasion I write a cheque eg school fees, they automatically take money from my savings account and put it in the current account to cover it. First cheque account I opened was with Bank of Asia in 1998, so it's not new either

[fletchsmile]

the rest of the country outside BKK are largely peasants.

Oi!

I thought I'd covered my ass by saying "largely" I guess you're claiming to be an exception

[inthepink]

Regarding the absolute salary numbers even in Bangkok where salaries are highest B250 is the going rate for a 12-hour day, often in a hazardous working environment, and that's for Thais. The illegals work for much less - at least those employed by Thais do, I do know some well-paid Burmese maids employed by generous foreigners (Thais call them soft-hearted suckers) at around 8000 per month. However many if not most work for under 6K - but they usually are housed and fed by their employer in exchange for 24x7 availability, often not paid for days off if any.

The vast majority of Thais work between this level and the average, which I also understand to be around 10,000K, and many many make very little cash at all, living off the land and/or the kindness of wealthier family members, neighbors and charity.

The percentage of Thais making "far more" than the average - would you consider 15K to be "far more"? 20? would be relatively small, quickly approaching single digits.

I believe that 250 baht a day is the minimum wage in BKK, not the "going rate". My point really though was not to argue about statistics but merely to say that there are hundreds of thousands of Thai people earning multiples of the oft quoted 10k average. Some working for multinationals are pulling in 6 figures a month, and it is the wealthier middle class that are buying the "multi-million baht houses" to which somebody referred earlier, not factory workers earning minimum wage.

This might seem like an obvious statement but in a thread that started off proposing that there is a credit bubble in Thailand and household debt is out of control, certain posters seemed to suggest that the number of expensive houses compared to the earning power of the average worker somehow had a bearing on this topic. If anybody truly believes that Thai banks are handing out mortgages for 5-10 million baht and above to workers earning 6k a month, they need their head examined.

Whenever the subject of wages for Thai workers comes up on Thaivisa it seems that there is a certain subset of posters who refuse to believe that there is a growing middle class, many of whom are earning far in excess of 10k a month. It's almost as if admitting that this is so would somehow undermine their feelings of superiority.

Anecdotal evidence such as how much one's wife earns or how little the family down the road are managing on is neither here nor there.

[chiangmaikelly]

the rest of the country outside BKK are largely peasants.

Oi!

I thought I'd covered my ass by saying "largely" I guess you're claiming to be an exception

It might be an idea to visit Thailand sometime before you become an expert.

[inthepink]

This is yet another stupid discussion based on the personal experiences of an individual, purporting to be representative of the country and population as a whole, it's ludicrous, of course people use cheques to buy and sell big ticket items, that you don't is something else entirely.

If it was not the norm it would be ludicrous. It also is central to the household debt held by Thai people. Where do you pay your electric bill? 7/11 cash. Where do you pay your water bill? 7/11 cash. How do you pay your satellite bill? Cash. Or 3BB internet? Cash. You can pay everything in Thailand in Cash. How do you know what is the percent of debt when everything in a society can be paid for in Cash? Do you see the problem here?

Do you know anyone who has a checking account in Thailand? I don't know one person. Business sure but individuals none.

Sometimes I really feel like I am the only person who lives in Thailand. Does anyone posting on Thai Visa have a personal checking account from a Thai bank? I would bet less than 1%.

When buying a house for my wife did not want to carry around a large amount of cash to the Land office, so purchased a bank cashiers cheque, only cost a 100 baht or so...

I realize that but have you ever known anyone who had a personal checking account from a Thai bank?

When you say "checking account", do you mean a current account or does it have to be an account with a check book? I ask this because banks in the UK are doing away with cheques completely, so nobody will have what you might be calling a checking account in the UK soon.

However, if you mean a current account then everybody I know in Thailand has such an account, with a debit card that they can use to make payments, and most have a credit card too.

[chiangmaikelly]

If it was not the norm it would be ludicrous. It also is central to the household debt held by Thai people. Where do you pay your electric bill? 7/11 cash. Where do you pay your water bill? 7/11 cash. How do you pay your satellite bill? Cash. Or 3BB internet? Cash. You can pay everything in Thailand in Cash. How do you know what is the percent of debt when everything in a society can be paid for in Cash? Do you see the problem here?

Do you know anyone who has a checking account in Thailand? I don't know one person. Business sure but individuals none.

Sometimes I really feel like I am the only person who lives in Thailand. Does anyone posting on Thai Visa have a personal checking account from a Thai bank? I would bet less than 1%.

When buying a house for my wife did not want to carry around a large amount of cash to the Land office, so purchased a bank cashiers cheque, only cost a 100 baht or so...

I realize that but have you ever known anyone who had a personal checking account from a Thai bank?

When you say "checking account", do you mean a current account or does it have to be an account with a check book? I ask this because banks in the UK are doing away with cheques completely, so nobody will have what you might be calling a checking account in the UK soon.

However, if you mean a current account then everybody I know in Thailand has such an account, with a debit card that they can use to make payments, and most have a credit card too.

Checking account is an account with checks; so yes a check book. Personal checking account.

[BigJohnnyBKK]

Whenever the subject of wages for Thai workers comes up on Thaivisa it seems that there is a certain subset of posters who refuse to believe that there is a growing middle class, many of whom are earning far in excess of 10k a month. It's almost as if admitting that this is so would somehow undermine their feelings of superiority.

Just as there are those who always try to minimize the much greater impact of the top tiny sliver and the fact that the overwhelming majority of the population is still rural-based dirt poor people living hand-to-mouth.

The middle is definitely growing but not yet that important from a purely economic macro-level basis.

[chiang mai]

I'm going to come back to the original question of whether there is a credit bubble and is household debt excessive: my answer is no there is not and no it is not. If either of those things were true then we would be seeing a much higer level of non performing loans (bad debt) via the banks and this is not happening. Of course, if we don't believe what the bank of Thailand is reporting, that's a different problem but frankly, I do. I think the problem that some of us are experiencing is that we can't quite get our heads around the fact that somchai is now living in a nice new three bed two bath jobbie and is driving a merc that even we can't afford to buy, this is Thailand after all and it's a third world country, that sort of thing shouldn't be happening. Oh well, they always did say that the meak will inherit .....!

[BigJohnnyBKK]

I'm going to come back to the original question of whether there is a credit bubble and is household debt excessive: my answer is no there is not and no it is not. If either of those things were true then we would be seeing a much higer level of non performing loans (bad debt) via the banks and this is not happening. Of course, if we don't believe what the bank of Thailand is reporting, that's a different problem but frankly, I do. I think the problem that some of us are experiencing is that we can't quite get our heads around the fact that somchai is now living in a nice new three bed two bath jobbie and is driving a merc that even we can't afford to buy, this is Thailand after all and it's a third world country, that sort of thing shouldn't be happening. Oh well, they always did say that the meak will inherit .....!

I agree 100% with your main point - there isn't a bubble, and although consumer debt is probably higher in many households, for many reasons it is much less of a systemic issue here than in the west.

Regarding Somchai, I personally have no problem recognizing that Asia is on the ascendancy, while the West has been on the decline for quite some time.

Those western countries that have large numbers of poorly educated unambitious people expecting to support a comfortable lifestyle from stable relatively unchallenging jobs will continue to see incomes at the low end sliding into third-world territory and further "M shaped" distribution polarization, while healthier more globally competitive countries in what used to be the third world will see continued increases in prosperity - in other words the two will end up equalizing over time.

Much of America for example is already in third world conditions, and that will probably get worse over time.

The ascendancy of globalization will make national boundaries less and less relevant to economics. This is IMO only fair from an abstract POV, people should be allowed to migrate freely for economic purposes, but the end results will not be perceived that way among the hoi polloi of the ex "first world".

I only wish they would disappear politically at the same time, except I don't fool myself that what would come after would be any better.

[inthepink]

Whenever the subject of wages for Thai workers comes up on Thaivisa it seems that there is a certain subset of posters who refuse to believe that there is a growing middle class, many of whom are earning far in excess of 10k a month. It's almost as if admitting that this is so would somehow undermine their feelings of superiority.

Just as there are those who always try to minimize the much greater impact of the top tiny sliver and the fact that the overwhelming majority of the population is still rural-based dirt poor people living hand-to-mouth.

The middle is definitely growing but not yet that important from a purely economic macro-level basis.

I already mentioned the fact that the highest earners distort average salaries so you can't be referring to me.

If by rural-based dirt poor people, you mean those involved in agriculture, I believe they make up around 40 percent of the workforce and account for just 10 percent of GDP. All of this is still irrelevant of course. Dirt poor rural people don't get mortgages for expensive houses so I fail to see why you and others are still banging on about them.

Edited October 28, 2012 by inthepink

[inthepink]

Checking account is an account with checks; so yes a check book. Personal checking account.

OK, seems like an odd distinction to make when the world is moving away from paper-based transactions but I would assume the people I know with debit and credit cards can write personal cheques if they wish, so that would still be every Thai person I know.

[chiangmaikelly]

Checking account is an account with checks; so yes a check book. Personal checking account.

OK, seems like an odd distinction to make when the world is moving away from paper-based transactions but I would assume the people I know with debit and credit cards can write personal cheques if they wish, so that would still be every Thai person I know.

Nonsense. There are almost no people in Thailand with a personal checking account. One needs a checking account to write a personal check. An ATM debit card is not a checking account. The photo below is what they don't have in Thailand.

Edited October 28, 2012 by chiangmaikelly

[chiangmaikelly]

Checking account is an account with checks; so yes a check book. Personal checking account.

OK, seems like an odd distinction to make when the world is moving away from paper-based transactions but I would assume the people I know with debit and credit cards can write personal cheques if they wish, so that would still be every Thai person I know.

If you think the world is moving away from paper based transactions you have not been in Thailand long.

http://www.thaivisa....opy#entry578586

PS. 195 million active checking accounts in USA.

Edited October 28, 2012 by chiangmaikelly