Thailand's household debt rises fastest in Asia

[webfact]

Thailand's household debt rises fastest in Asia
By Digital Content



BANGKOK, July 28 -- Skyrocketing household debt in Thailand now has the highest expansion rate among Asian countries and investors are advised to monitor it closely, warned Sutapa Amornvivat, chief economist and executive vice president of Siam Commercial Bank, Thailand's oldest private bank.

Household debt in Thailand stood at 82.3 per cent of gross domestic product at the end of 2013 and low-income earners with an average monthly income of less than 10,000 baht are responsible for most of the household debt, Ms Sutapa said.

Describing the situation as critical to Thailand’s economy, which is recovering as it depresses domestic consumption, Ms Sutapa said prices of agricultural produce are still low. This is despite the state injection of funds into the system such as paying about Bt90 billion to farmers who had sold rice to the government under the now scrapped rice-pledging programme, .

A number of private companies have stopped overtime pay for their staff, she said. And household debt remains very high.

Domestic consumption has bottomed out and should recover if the public's confidence improves as projected, she said.

Meanwhile, Thanawat Polvichai, director of University of Thai Chamber of Commerce’s Economic and Business Forecast Centre, said that Thailand’s economy could expand between 4-5 per cent during the second half of 2014 due to improving domestic politics.

Dr Thanawat said the state was able prepare its budget expenditure plan for fiscal 2015, starting October 1, in time, and that the domestic economy would recover due to rising private investment.

The tourism industry is also projected to improve because of the current peace.

Thailand’s exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the country’s economy would grow more than two per cent. (MCOT online news)

-- TNA 2014-07-28

[englishoak]

The tourism industry is also projected to improve because of the current peace.

Thailand’s exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the country’s economy would grow more than two per cent.

Well everything should be just dandy then, no probs about people in debt im sure the TOT and Export Centre news will fix all their problems...

Edited July 28, 2014 by englishoak

[trogers]

The worry is when debts are being incurred just to cover daily cost of living, and not to buy large ticket items.

This means a person will just sink into a deeper hole as time passes as expenditure is higher than income.

Similar to those struggling in the West who are living day to day on their credit cards.

[robblok]

The tourism industry is also projected to improve because of the current peace.

Thailand’s exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the country’s economy would grow more than two per cent.

Well then everything should be just dandy then, no probs about people in debt im sure the TOT and Export Centre news will fix all their problems...

I looked at some graphs debt vs GDP and Thailand is not that bad compared to some countries especially the UK they are almost at the same level. It might be bad for a Asian country but for Western standards its not much.

[englishoak]

The tourism industry is also projected to improve because of the current peace.

Thailand’s exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the country’s economy would grow more than two per cent.

Well then everything should be just dandy then, no probs about people in debt im sure the TOT and Export Centre news will fix all their problems...

I looked at some graphs debt vs GDP and Thailand is not that bad compared to some countries especially the UK they are almost at the same level. It might be bad for a Asian country but for Western standards its not much.

Agreed the levels of personal household debt in the UK is about 90% ratio to GDP, then again the earning power is also a lot higher which means it can turn around that much quicker and also the fact that a large % of that is property debt and that property is going to still be around in a couple of decades and increase in price and return on the debt whereas most Thai property will be worthless in 20 years or virtually flatline due to the crap building regs and build quality.... so effectively here its lost money..the only worth it has is the land its on not the property after a few years of wear and tear, they dont have the first clue on maintenance or quality building, least thats my opinion of the second hand property market here.

[Nampetch]

The tourism industry is also projected to improve because of the current peace.

Thailand’s exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the country’s economy would grow more than two per cent.

Well then everything should be just dandy then, no probs about people in debt im sure the TOT and Export Centre news will fix all their problems...

I looked at some graphs debt vs GDP and Thailand is not that bad compared to some countries especially the UK they are almost at the same level. It might be bad for a Asian country but for Western standards its not much.

Agreed the levels of personal household debt in the UK is about 90% ratio to GDP, then again the earning power is also a lot higher which means it can turn around that much quicker and also the fact that a large % of that is property debt and that property is going to still be around in a couple of decades and increase in price and return on the debt whereas most Thai property will be worthless in 20 years or virtually flatline due to the crap building regs and build quality.... so effectively here its lost money..the only worth it has is the land its on not the property after a few years of wear and tear, they dont have the first clue on maintenance or quality building, least thats my opinion of the second hand property market here.

crap building regs and build quality MADE ME LAUGH!

[webfact]

Thailand’s household debt growth is the highest in Asian countries



BANGKOK: -- A chief economist of a commercial bank has advised investors to monitor the country's high growth of household debt which has become the highest in Asian countries.

Advice from the economist came after a recent survey by the University of Thai Chamber of Commerce (UTCC) showed household debts have increased to an average of 219,000 baht per household this year which are the highest level in nine years with 49 percent being unorganized debts.

Earlier UTCC’s Economic and Business Forecast Centre director Thanawat Pholvichai said the centre conducted behavioural spending of 1,200 households during July 14-20.

The findings from the study revealed 74.8 percent of the households polled said their debts have increased this year whereas 25.2 percent said they have no debts; average household debts amount to 219,000 baht representing an increase of 16.6 percent compared to last year’s average household debts which amounted to 188,000 baht.

Chief economist and executive vice president of Siam Commercial Bank Ms Sutapa Amornvivat said household debt in Thailand stood at 82.3 per cent of gross domestic product at the end of 2013.

She said low-income earners with an average monthly income of less than 10,000 baht formed the largest part of the household debt.

Describing the situation as critical to Thailand’s economy, which is recovering as it depresses domestic consumption, Ms Sutapa said prices of agricultural produce are still low.

This is despite the state injection of funds into the system such as paying about 90 billion baht to farmers who had sold rice to the government under the now scrapped rice-pledging programme.

She said a number of private companies have stopped overtime pay for their staff as household debt remains very high.

Domestic consumption has bottomed out and should recover if the public confidence improves as projected, she said.

Meanwhile UTCC’s Economic and Business Forecast Centre director Thanawat viewed Thailand’s economy could expand between 4-5 per cent during the second half of 2014 due to improving domestic politics.

He said the state was able to prepare its budget expenditure plan for fiscal 2015, starting October 1, in time, and that the domestic economy would recover due to rising private investment.

The tourism industry is also projected to improve because of the current peace.

Thailand’s exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the country’s economy would grow more than two per cent.

Source: http://englishnews.thaipbs.or.th/thailands-household-debt-growth-highest-asian-countries/


-- Thai PBS 2014-07-28

[trogers]

The tourism industry is also projected to improve because of the current peace.

Thailands exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the countrys economy would grow more than two per cent.

Well then everything should be just dandy then, no probs about people in debt im sure the TOT and Export Centre news will fix all their problems...

I looked at some graphs debt vs GDP and Thailand is not that bad compared to some countries especially the UK they are almost at the same level. It might be bad for a Asian country but for Western standards its not much.

Agreed the levels of personal household debt in the UK is about 90% ratio to GDP, then again the earning power is also a lot higher which means it can turn around that much quicker and also the fact that a large % of that is property debt and that property is going to still be around in a couple of decades and increase in price and return on the debt whereas most Thai property will be worthless in 20 years or virtually flatline due to the crap building regs and build quality.... so effectively here its lost money..the only worth it has is the land its on not the property after a few years of wear and tear, they dont have the first clue on maintenance or quality building, least thats my opinion of the second hand property market here.

The worry is that the major portion of household debts is being held by low income earners. Highly unlikely they are holding real property assets that cause concern to you.

[amerasian]

You people at the BOT should all be fired every last person. A strong Baht is the worst thing in the world for a suffering economy. Where did you get your economics schooling? Your the problem.......Your all grosely overpaid and have not a clue about business. Your frauds,,,,

[canuckamuck]

Giving everyone 100,000 back on a car they can't afford and wouldn't have bought otherwise certainly adds to the household debt.

[shirtless]

What happens when the piper comes to the door , people here need to understand debts need to be serviced, You cannot spend face.

[Jeremy50]

The baht kept high so the high-so's can buy houses in London. Let the Baht weaken as it should, and the economy will improve.

[belg]

i tought the army would come up with a scam to pay all the loansharks, in stead of putting them into jail

[HUAHIN62]

The tourism industry is also projected to improve because of the current peace.

Thailands exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the countrys economy would grow more than two per cent.

Well then everything should be just dandy then, no probs about people in debt im sure the TOT and Export Centre news will fix all their problems...

I looked at some graphs debt vs GDP and Thailand is not that bad compared to some countries especially the UK they are almost at the same level. It might be bad for a Asian country but for Western standards its not much.

Agreed the levels of personal household debt in the UK is about 90% ratio to GDP, then again the earning power is also a lot higher which means it can turn around that much quicker and also the fact that a large % of that is property debt and that property is going to still be around in a couple of decades and increase in price and return on the debt whereas most Thai property will be worthless in 20 years or virtually flatline due to the crap building regs and build quality.... so effectively here its lost money..the only worth it has is the land its on not the property after a few years of wear and tear, they dont have the first clue on maintenance or quality building, least thats my opinion of the second hand property market here.

The worry is that the major portion of household debts is being held by low income earners. Highly unlikely they are holding real property assets that cause concern to you.

What the article didn't say was that credit card cash advances also showed a sharp increase this year, which indicates that the middle income is also under financial stress, as well as the fact that these debt figures excludes loan shark figures. Add to this a near 100% (220K with most being graduates) increase in unemployment yoy, slowing world economic growth (IMF), drought (with a projected El Nino later in the year), NPL's increasing, lower rice price for farmers, higher inflation, less FDI's, inflated asset prices and banks still carrying properties on their books from the 1997/98 crisis. How does the song go, be happy .......

Edited July 28, 2014 by HUAHIN62

[kinmaew]

Dont worry girls another farang ATM machine is on its way to LOS happy to give all my money away.

[englishoak]

The tourism industry is also projected to improve because of the current peace.

Thailands exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the countrys economy would grow more than two per cent.

Well then everything should be just dandy then, no probs about people in debt im sure the TOT and Export Centre news will fix all their problems...

I looked at some graphs debt vs GDP and Thailand is not that bad compared to some countries especially the UK they are almost at the same level. It might be bad for a Asian country but for Western standards its not much.

Agreed the levels of personal household debt in the UK is about 90% ratio to GDP, then again the earning power is also a lot higher which means it can turn around that much quicker and also the fact that a large % of that is property debt and that property is going to still be around in a couple of decades and increase in price and return on the debt whereas most Thai property will be worthless in 20 years or virtually flatline due to the crap building regs and build quality.... so effectively here its lost money..the only worth it has is the land its on not the property after a few years of wear and tear, they dont have the first clue on maintenance or quality building, least thats my opinion of the second hand property market here.

The worry is that the major portion of household debts is being held by low income earners. Highly unlikely they are holding real property assets that cause concern to you.

Actually I meant a lot of UK debt is property but it holds value compared to a mortgage here on one. Thai household debt is much more likely to be cash based debt rather than asset in the poorer classes.

Ergo with rising prices and inflation with relative low or flatline wages not keeping pace it will only get worse, also a large part of not having been high asset debt here much before is the lack of credit options like cards or other credit. This is growing and if they think 82% is bad just wait until the real professional business credit sharks "have it now pay later" become as widely used as the west... not going to be pretty.

Thais really dont know how to live within their means more-so now than ever before, its very much become an I want, i deserve, I will have now and dont think about after thing now. Its always been that as Buddhism teaches to live in the present for tomorrow anything could happen, you might die but generally you do wake up and you do have to service your debt.

Edited July 28, 2014 by englishoak

[chiang mai]

Much nonsense being talked here:

UK consumer debt to GDP ratio is around 150% currently, a few years ago it was over 170%. The fact that UK earning power is higher than Thailands means squat because the UK GDP is around $2.7 trillion whereas Thailand, with a similar sized population, is around $370 billion. In case you missed the point, the difference is, the same number of people earning less but also owing much less.

http://www.cityam.com/article/1391404446/britain-s-consumers-still-have-dangerously-high-levels-debt

[trainman34014]

Dont worry girls another farang ATM machine is on its way to LOS happy to give all my money away.

Good; i'm running out and somebody needs to take over !!

[rickirs]

A different picture of the economy:

Economic and Business Forecast Centre study conducted in July 2014 are as follows:

"74.8 percent of the households polled said their debts have increased this year whereas 25.2 percent said they have no debts; average household debts amount to 219,000 baht representing an increase of 16.6 percent compared to last year’s average household debts which amounted to 188,000 baht.

The reason why many households resorted to unorganized money lenders because they had borrowed up to the limits permissible by financial institutions.

39.7 percent of the households said they borrowed for personal spending; 17 percent said they borrowed to repay unorganized debts and 10.9 percent said they borrowed to buy vehicles.

Asked about their ability to repay debts, 83 percent admitted that they used to have problem of repaying debts and 17 percent said that they did not have any problem."

[Emster23]

"A number of private companies have stopped overtime pay for their staff, she said. And household debt remains very high." We have labor laws where I come from that require overtime pay of at least 150%, as do most farang countries. Work more, earn the same. Great for debt retirement. Are there any labor laws here, other than 300 baht a day pay?

[Asiantravel]

Much nonsense being talked here:

UK consumer debt to GDP ratio is around 150% currently, a few years ago it was over 170%. The fact that UK earning power is higher than Thailands means squat because the UK GDP is around $2.7 trillion whereas Thailand, with a similar sized population, is around $370 billion. In case you missed the point, the difference is, the same number of people earning less but also owing much less.

http://www.cityam.com/article/1391404446/britain-s-consumers-still-have-dangerously-high-levels-debt

I don't believe comparing GDP between Thailand and UK is particularly relevant regarding this problem? This is a serious social problem in both countries when so many in society are in debt just to purchase consumer items which wear out. Consumer debt is the worst kind of debt possible and its not like they're borrowing money for business purposes where they may have at least with a business loan some prospect of earning an income to offset the loan costs.

[ratcatcher]

Dont worry girls another farang ATM machine is on its way to LOS happy to give all my money away.

Good; i'm running out and somebody needs to take over !!

You are obviously well trained.

[chiang mai]

Much nonsense being talked here:

UK consumer debt to GDP ratio is around 150% currently, a few years ago it was over 170%. The fact that UK earning power is higher than Thailands means squat because the UK GDP is around $2.7 trillion whereas Thailand, with a similar sized population, is around $370 billion. In case you missed the point, the difference is, the same number of people earning less but also owing much less.

http://www.cityam.com/article/1391404446/britain-s-consumers-still-have-dangerously-high-levels-debt

I don't believe comparing GDP between Thailand and UK is particularly relevant regarding this problem? This is a serious social problem in both countries when so many in society are in debt just to purchase consumer items which wear out. Consumer debt is the worst kind of debt possible and its not like they're borrowing money for business purposes where they may have at least with a business loan some prospect of earning an income to offset the loan costs.

I don't either, but since an earlier poster raised the subject I thought it useful to provide more accurate numbers and to dispel the myth that, simply because people earn more in a particular country, that debt is easier to pay down, it's certainly not the case when that debt is so many times times larger in the first place..

[wabothai]

thailand is in urgent need of financial (household) planners and debt managers.

they can be found in farang country.

[trogers]

thailand is in urgent need of financial (household) planners and debt managers.

they can be found in farang country.

Reminds me of family planning back in the 70s. A man walks in for consultation, "Doctor, here are my wife and my 5 children. What's the plan?"

[brianP]

Not being a welfare state helps. And not having so many credit cards that are rampant in the west, helps people live within their means. Children are still the IRA's here for the old people.

Edited July 28, 2014 by brianP

[metisdead]

This topic is about "Thailand's household debt rises fastest in Asia", last time I looked UK was not in Asia. Let's keep the discussion related to Thailand's household debt. Further off topic comparisons with UK will be removed.

[sonnyson]

Thailands household debt growth is the highest in Asian countries

BANGKOK: -- A chief economist of a commercial bank has advised investors to monitor the country's high growth of household debt which has become the highest in Asian countries.

She said low-income earners with an average monthly income of less than 10,000 baht formed the largest part of the household debt.

The legacy of the Yingluck administration.

[trogers]

Not being a welfare state helps. And not having so many credit cards that are rampant in the west, helps people live within their means. Children are still the IRA's here for the old people.

I do recall Thai farmers and taxi drivers being issued credit cards not too long ago by the Yingluck government.

[Cake Monster]

The ultimate responsibility for all the debt has to lie with the banks, and their loose lending policies.

Whether these policies are intentional, in order to sieze assets upon defaults, thus making the company books look better than they actually are, or they are just a product of total mis - management who can tell ?

The banking sector here in Thailand has recently changed their policy to envoke tighter lending, but all too late, as the debt problem has escalated over the past 2 years to an almost unmanageable level