Household Debt Remains a Big Concern in Thailand

[trogers]

Do Thai people look to the future ? Buy now ..cant pay in the future

Thai people look at the future as far as what they gonna have for their next meal. Everything beyond that is taboo.

It is not only a Thai condition

Country with highest house hold debt as % of GDP Source: The Economist

#1 Ireland

#2 UK

#3 Canada

#4 South Korea

#5 Malaysia

#6 US

#7 Thailand

#8 Japan

#9 Singapore

#10 HK

An important point to consider in comparing the countries above is, what did the people do with monies acquired through debts.

[sirineou]

in the post above, excellent info

Please provide a clickible link

Sorry my bad

as a percentage of GDP

http://www.rediff.com/business/slide-show/slide-show-1-special-15-countries-that-have-highest-household-debt/20131119.htm#2

as a Percentage of disposable income a more important statistic in IMO as it affects consumer spending .

which is the subject of this thread.

http://www.economist.com/news/economic-and-financial-indicators/21578669-household-debt

PS: the disposable income household debt chart info is three years old and I dont think reflects the affect the car buying scheme affect in personal debt in Thailand,

Edited April 12, 2015 by sirineou

[sirineou]

Do Thai people look to the future ? Buy now ..cant pay in the future

Thai people look at the future as far as what they gonna have for their next meal. Everything beyond that is taboo.

It is not only a Thai condition

Country with highest house hold debt as % of GDP Source: The Economist

#1 Ireland

#2 UK

#3 Canada

#4 South Korea

#5 Malaysia

#6 US

#7 Thailand

#8 Japan

#9 Singapore

#10 HK

An important point to consider in comparing the countries above is, what did the people do with monies acquired through debts.

Sure absolutely right, a very astute observation

if indeed the increase in Household debt in Thailand was caused in large part by the car buying scheme, then IMO it would be an investment in durable goods and have a more positive affect in the economy, than , let's say investing in disposable goods .

[Gunna]

The attached table shows that between 2007 and 2014 Thailand's household debt had one of the largest increases in the world, 26%

What is saving Thailand is corporate debt has increased a very small percentage, although this may mean very little has been invested in Thailand, but also could be self financed from profits

Government debt has only increased by a relatively small amount as well

Debt.pdf

Edited April 12, 2015 by Gunna

[sirineou]

an important point to remember is that a certain amount of debt in a growing economy is desired and has the positive affect of increasing the money supply with out diluting it's value

What I am saying is highly arguable, but consider the following

the economy of a mythical country is worth $100.00 of which all $100.00 is lend out at a 10% interest, the borrower pays back the debt plush 10% interest which is $110.00 , now the money supply has increased by 10%

If the borrowed money was invested in a positive manner that added value to the economy, then the money supply increases with out having it's value diluted.

[MaeJoMTB]

I've noticed more middle class (middle aged) women advertising themselves on the dating sites recently.

It appears that household debt is driving them, and their new cars, into the hands of foreigners ....... literally.

[sirineou]

The attached table shows that between 2007 and 2014 Thailand's household debt had one of the largest increases in the world, 26%

What is saving Thailand is corporate debt has increased a very small percentage, although this may mean very little has been invested in Thailand, but also could be self financed from profits

Government debt has only increased by a relatively small amount as well

Debt.pdf

Thank for the info

IMO a link rather than a download is more desirable, Some people are apprehensive downloading items in to their computer to view them, plus afterwards you have to find it an deleted as not to clatter your HD

IMO a link is safer and more convenient

but non the less important info

I believe this dramatic affect might be in part due to the car buying scheme, but in large part it is as a result of rising prices while wages remain stagnant. If that's the case then then this increase signals difficult times ahead

The Bank of Thailand projects an inflation rate of 2.1% which is a desirable rate of inflation, but I find this number difficult to reconcile with the prices I see in the stores.

[gandalf12]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Do Thai people look to the future ? Buy now ..cant pay in the future

same as Canada, USA and most of Europe

[micmichd]

The graph that shows debt with credit cards starts before 1980. I would think very very very few Thais in the 1970's and 1980's even had a credit card so no debta. How many thais do you know even today that own a credit card. What a useless graph. The rest of the story was about household debt but graph was credit card why is that?

I have had a chance to look into many a Thai ladies wallet over the years and the number of credit cards they have is well astounding to put it mildly. I carry one that is paid in full each and every month. I even time my charges to co-inside with the payment date to get the free credit period of up to 60 days. If they can get multiple credit cards that easy how easy is it for them to get a bank loan or other financing.?

How do you tell a credit card from a debit card, just by looking at it?

[bangkokfrog]

The OP mentions the debt brought on by the new car scheme which was largely to appease the motor industry who had been flooded out in 2011 but makes no mention of the other major reasons for debt.

The most prominent being the late or non payment of farmers under the rice pledging scheme which forced many into unsustainable debt just to survive let alone plant another crop.

Then there were the farmers who were not eligible for the scheme who had to pay the increased prices for rent and farming supplies brought on by the scheme.

The Govt of the days answer to this was to give out credit cards to farmers and taxi drivers who had no idea of the consequences of using them, this increased debt even farther.

Then there was the increase of corruption to unprecedented levels under the previous administration which allowed the loan shark industry to flourish as well as increasing costs across the board.

Further to this, just look at the current advertising by the banks on personal loans. They all advertise WE NEVER SAY NO. If that doesn't put household debt through the roof, then god knows where the economy will end up. This current lending scheme is reminiscent of similar schemes in Europe, USA and the UK that caused the GEC of the naughties. But this is Thailand and they will always do it their way, so really who are we as guests in this country to actually criticise. We moved here from our own countries because it was economically better for us and we also liked the place. So just for a moment think you are back in your home country and what approach you would have to foreigners complaining about the way your home country did things, I guarantee that 99.9% of you would all be saying if you don't like it go back to where you came from. So to all you whinging whining farangs, if you don't like the way the Thais do things (whether it be right or wrong) go back to where you came from, otherwise just shut the f up.

What a stupid, one-sided comment. Some of us really care about this country and those people who don't know better and are encouraged (duped) into borrowing too much. I think that this might be a better country if people like you who think you are superior and know all were to go back home !!!

[Beetlejuice]

Do Thai people look to the future ? Buy now ..cant pay in the future

The whole world economy is based on debt.

Without debt most of the world`s banking systems would collapse, many of the brokers including real estate agents and the property markets that rely on mortgages and loans paid back with interest would also collapse. This also applies to many large businesses that rely on purchases via credit paid back with interest, including the motor industries.

How can Governments try to deter people from taking on debts when their economies depend on it? Use ya noddle and think about it? Debt is not only a Thailand phenomenon.

In my opinion, people that live their lives and try to archive by taking on constant debts are mugs, because once trapped into those situations, it is extremely difficult to get out of, they become pwned by the creditors. It`s rather like selling the soul to the devil, gain the pleasures of having what you want now, and suffer the burden of payback time.later But I assume we have all been there, mortgages, credit card debts and loans taken out for this and that in the past. Unfortunately for many struggling to make their way, taking out loans is a way of life or even a must in some cases.

Edited April 12, 2015 by Beetlejuice

[daboyz1]

Like I have done in the past and in many other cases the falang will come to the rescue and pay out. It could be classed as stupidity but I think you have to except this in many thai-falang relationships

When you do that, you set a precedent. This means that they can continue to be irresponsible with their finances and they will be bailed out by a farang. It encourages bad behavior and in reality it helps no one but actually hurts them. Cut them off and trust me they'll find a way, or do without. Been doing it long before you showed up and will be doing it long after you're gone.

[daboyz1]

Like I have done in the past and in many other cases the falang will come to the rescue and pay out. It could be classed as stupidity but I think you have to except this in many thai-falang relationships

Since when is a piece of fruit able to come to the rescue and pay someone's debt, and when did Thais start having relationships with pieces of fruit. I'm sure meant FARANG didn't you?

farang and falang are the same thing. The slang term is derived from the name for the fruit.

[kleelof]

Do Thai people look to the future ? Buy now ..cant pay in the future

Thai people look at the future as far as what they gonna have for their next meal. Everything beyond that is taboo.

It's funny, I got reprimanded once for calling someone an idiot on here but I see a ss ho les almost every day on here making comments like this about Thais with no word from the admins.

Why is that?

Edited April 12, 2015 by kleelof

[Nick167]

Credit...loans.....these things do not understand responsibility, planning, etc. Just see the local Songkran....many take holidays on credit cards, etc....spend monies on things they do not need, even the poor who cannot affrod daily necessities.....pool togther to rent a loud music system and buy beer (here in Onnut!) but have no money for food! PAthetic things. Let then suffer, they are beyong salvation. Do not help them and the governemnet should stop using hard working tax-payers monies to bail these things out.

[micmichd]

Bloody Puritanism, what "salvation"?
It's Songkran now, <<<< Thai language removed >>>> time.
In the West they have carnival - also 3 days, so what?

Edited April 15, 2015 by metisdead

[Heng]

Do Thai people look to the future ? Buy now ..cant pay in the future

Around 15% do, IMO you'll find a similar minority in most countries. These are the folks who typically employ, rent property to, and lend funds to the rest.

:-)

[Thai at Heart]

27% home loans and 16% cars. What is the other 57%? Unsecured credit cards? That is the scary number

[givenall]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Strange story and very odd graph. Quotes no one, thin on facts, provides no insights that are not already known.

I love these kind of news. start with a problem. ends up with the problem does not exists. basically by the time I finish reading the article I find out I earned nothing

[TigerandDog]

The OP mentions the debt brought on by the new car scheme which was largely to appease the motor industry who had been flooded out in 2011 but makes no mention of the other major reasons for debt.

The most prominent being the late or non payment of farmers under the rice pledging scheme which forced many into unsustainable debt just to survive let alone plant another crop.

Then there were the farmers who were not eligible for the scheme who had to pay the increased prices for rent and farming supplies brought on by the scheme.

The Govt of the days answer to this was to give out credit cards to farmers and taxi drivers who had no idea of the consequences of using them, this increased debt even farther.

Then there was the increase of corruption to unprecedented levels under the previous administration which allowed the loan shark industry to flourish as well as increasing costs across the board.

Further to this, just look at the current advertising by the banks on personal loans. They all advertise WE NEVER SAY NO. If that doesn't put household debt through the roof, then god knows where the economy will end up. This current lending scheme is reminiscent of similar schemes in Europe, USA and the UK that caused the GEC of the naughties. But this is Thailand and they will always do it their way, so really who are we as guests in this country to actually criticise. We moved here from our own countries because it was economically better for us and we also liked the place. So just for a moment think you are back in your home country and what approach you would have to foreigners complaining about the way your home country did things, I guarantee that 99.9% of you would all be saying if you don't like it go back to where you came from. So to all you whinging whining farangs, if you don't like the way the Thais do things (whether it be right or wrong) go back to where you came from, otherwise just shut the f up.

Having a bad hair day are we??

Many of us have been living here for a long time, and don't consider ourselves guests.

We have invested here, have Thai families and care about the way the country is run!!

We have every right to criticize the powers, because we are taxpayers (with limited or no rights) but no one is going to tell us to shut up.

Especially not a tourist!!

Not possible to have a bad hair day, I don't have any. It doesn't matter how long you've lived here, whether you have money invested in the country or not and/or have Thai families or whether you consider yourself guests or not, until such time as YOU become a Thai Citizen, you ARE legally a guest in this country. So until such times as you become a Thai citizen, shut the f up if all you are going to do is whinge and moan about the way things are done. Just remember why you came her in the first place, because it was economically better for you and you liked the place the way it was, warts and all.

BTW you tool, I live here permanently too, and there a lots of things that could be done better and more efficiently, but that's the Thai way, so if you don't like it LEAVE.

Edited April 13, 2015 by TigerandDog

[trogers]

27% home loans and 16% cars. What is the other 57%? Unsecured credit cards? That is the scary number

Just check out the long queues at banking counters during paydays. No, these people are not cashing in their pay cheques. They are queuing to pay their credit card bills.

[Beetlejuice]

Like I have done in the past and in many other cases the falang will come to the rescue and pay out. It could be classed as stupidity but I think you have to except this in many thai-falang relationships

It`s amazing how these themed threads bring out the long and suffering, moaners, wringers and Thai bashers.

If there are Thai people scrounging off you, then it`s probably because you have associated yourself with those from the lower classes of Thai society or you`re desperate. Most middle to upper class Thais would not place themselves in situations where they were dependant on some old farang for handouts, most have their pride. Also I don`t agree that the situations you describe have to be accepted, unless you allow yourself to be treated as a gullible fool, the long and suffering who feels you have to pay to maintain your relationships with people.

I have not been in the situation you describe, never been that desperate. Once people (regardless of who they are) begin expecting hand outs from me, than they are history.

There are no laws in Thailand, written or unwritten, which impose farangs to give free handouts to Thais. Those that do, it is their choice. No point in investing resources into such useless relationships and then complaining about it afterwards. Sad.

[Godders]

I love all these posters who sneer at Thai people for getting into debt to buy houses, cars and other goods they can't afford to pay cash for.. What on earth do they think caused the credit crunch in the West - which has affected every country in the world - if is wasn't dumb clucks using debit and credit cards to get in over their heads.

People in glass houses. . .

[chiang mai]

I love all these posters who sneer at Thai people for getting into debt to buy houses, cars and other goods they can't afford to pay cash for.. What on earth do they think caused the credit crunch in the West - which has affected every country in the world - if is wasn't dumb clucks using debit and credit cards to get in over their heads.

People in glass houses. . .

Actually it was risky mortgages and not unsecured credit that caused the credit crunch although the jist of your post remains valid. The unsecured credit/personal debt problem in the West remains, how else could so many TVF posters afford their holidays in LOS.

[micmichd]

It's only a question of time until Farangs come home to find everything is seized by banks.

[retsdon]

Do Thai people look to the future ? Buy now ..cant pay in the future

Thai people look at the future as far as what they gonna have for their next meal. Everything beyond that is taboo.

It is not only a Thai condition

Country with highest house hold debt as % of GDP Source: The Economist

#1 Ireland

#2 UK

#3 Canada

#4 South Korea

#5 Malaysia

#6 US

#7 Thailand

#8 Japan

#9 Singapore

#10 HK

What was the debt acquired for is the question. The UK is high, but 90 percent of UK household debt is owed on property, which historically is an appreciating asset. Seventy percent plus of Thai loans are for vehicles or other unspecified things - almost certainly consumer goods - i.e. Items which will eventually depreciate to zero. In 20 years the Brit will own a house that's likely to be worth as much or more as he's paid in total ...including the interest. Your Thai borrower will own nothing. He'll be as poor as the day he made the first payment. His payments will have been nothing but a straightforward transfer of his wealth to a bank and multi-national corporation. It's mirrors and beads to the redskins stuff.

[micmichd]

"In 20 years the Brit will own a house"

unless the Brit faces a crisis like in 2008...

[chiang mai]

Do Thai people look to the future ? Buy now ..cant pay in the future

Thai people look at the future as far as what they gonna have for their next meal. Everything beyond that is taboo.

It is not only a Thai condition

Country with highest house hold debt as % of GDP Source: The Economist

#1 Ireland

#2 UK

#3 Canada

#4 South Korea

#5 Malaysia

#6 US

#7 Thailand

#8 Japan

#9 Singapore

#10 HK

What was the debt acquired for is the question. The UK is high, but 90 percent of UK household debt is owed on property, which historically is an appreciating asset. Seventy percent plus of Thai loans are for vehicles or other unspecified things - almost certainly consumer goods - i.e. Items which will eventually depreciate to zero. In 20 years the Brit will own a house that's likely to be worth as much or more as he's paid in total ...including the interest. Your Thai borrower will own nothing. He'll be as poor as the day he made the first payment. His payments will have been nothing but a straightforward transfer of his wealth to a bank and multi-national corporation. It's mirrors and beads to the redskins stuff.

Unsecured lending in the UK, credit card debt and similar, totalled GBP 249 billion last year, that's GBP 10k per household. That is IN ADDITION to mortgage (secured) lending which averaged GBP 45k per household.

http://themoneycharity.org.uk/money-statistics/

[Thai at Heart]

Do Thai people look to the future ? Buy now ..cant pay in the future

Thai people look at the future as far as what they gonna have for their next meal. Everything beyond that is taboo.

It is not only a Thai condition

Country with highest house hold debt as % of GDP Source: The Economist

#1 Ireland

#2 UK

#3 Canada

#4 South Korea

#5 Malaysia

#6 US

#7 Thailand

#8 Japan

#9 Singapore

#10 HK

What was the debt acquired for is the question. The UK is high, but 90 percent of UK household debt is owed on property, which historically is an appreciating asset. Seventy percent plus of Thai loans are for vehicles or other unspecified things - almost certainly consumer goods - i.e. Items which will eventually depreciate to zero. In 20 years the Brit will own a house that's likely to be worth as much or more as he's paid in total ...including the interest. Your Thai borrower will own nothing. He'll be as poor as the day he made the first payment. His payments will have been nothing but a straightforward transfer of his wealth to a bank and multi-national corporation. It's mirrors and beads to the redskins stuff.

Historically yes property appreciates, but look at the mess it causes when it gets out of kilter. That's why they shouldn't let banks mess with the property market so much with idiotic lending. The property market is a massive store of wealth in the UK which should be protected from reckless lending.

Just wait for a rate rise in the UK. Households will be underwater at just a moderate rise.

[mikemac]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Do Thai people look to the future ? Buy now ..cant pay in the future

same as Canada, USA and most of Europe

Exactly, a lot of the mistakes made by Thai people are also made by Westerners, but it is easy to criticize the Thais and conveniently ignore the fact that we all have household debt.