Household debts rise to 10.57 trillion baht in first half

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Household debts rise to 10.57 trillion baht in first half



BANGKOK: -- The National Economic and Social Development Board (NESDB) says household debt has risen 6.4% to 10.57 trillion baht in the first quarter of this year, while credit card defaults also rose 28%in the second quarter.

NESDB secretary-general Arkhom Termpittayapaisith said household debts in the first quarter of 2015 stood at 10.57 trillion baht, representing a 6.4% growth or 79.9% of GDP.

Meanwhile unpaid bills of consumers credits in the second quarter also rose 7%, while debt payment defaults also shot up 15.5%.

But significantly credit card defaults also increased to 28%, though still not yet reaching alarming rate, but need close monitoring of defaults, he said.

However he said the government has given special attention to the solving of household debt with the launch of nano financing scheme.

He said latest figure showed nine nano financing firms have been granted permission to operate the business and now three have been in service.

As Bangkok Post reported, Meanwhile a NESDB report revealed that unemployment rate in the second quarter was 0.88% of the total workforce, down from 1% in the same period last year.

The workforce in the second quarter totalled 38.4 million, unchanged from the year-earlier period.

Of the total, 37.8 million were employed in the quarter, down by 0.2% year-on-year, mainly from farming employment, which dropped by 5.8%.

The widespread drought led farmers to postpone cultivation from May to the end of July.

Consequently, 315,848 farmers and farm workers became seasonally inactive, causing the seasonally inactive labour force to rise by 30.7%, which is not accounted for in unemployment.

Employment in non-farm sectors rose by 2.6% compared with a 0.3% decrease a year earlier. This was due mainly to higher employment in tourism, construction, transport and manufacturing.

But demand for workers remains strong, particularly for semi-skilled and highly skilled workers.

Most industries sought to reduce working hours rather than lay off workers.

The NESDB report said average working hours in the second quarter amounted to 43.6 per person per week, down by 1.5% from a year earlier.

But wages and salaries in the private sector excluding overtime pay and other benefits rose by 2.5%, and labour productivity by 3.4%.

Source: http://englishnews.thaipbs.or.th/household-debts-rise-to-10-57-trillion-baht-in-first-half

-- Thai PBS 2015-08-25

[Ricardo]

"all Thais will be rich after six months", pity it wasn't true, just "an election promise".

My wife reports that she's being approached for loans by local university-students, within weeks of their starting to study away from home, not a good sign.

[NextStationBangkok]

We are sitting on a bubble economy.

1. Retirees invested their whole life savings in pension funds, mutual funds and in stock market and on holidays. All started collapsing now. No more holidays.

2. Middle class working for big companies and invested their savings in shares and all plunged now. Most of their wealth have been wiped out.

3. Giant capitalist invested on natural resources like oil, metal and rare earth commodities and waiting for the price going up depends on China's growing demand.

The concept is how long the machines can produce things when humans have no money buy and no people to spend the money ? We are all sitting on a false economy with bundle of papers called currency.

It is like everyone wanted to eat good and delicious food. But there is no one out there to work on fields to produce the food, and no one is ready to cook on hot stove but wanted to eat delicious food.

One day we all have to go back to the fields and work hard for our food, rather than counting the papers and numbers on the screen.

[Anthony5]

"all Thais will be rich after six months", pity it wasn't true, just "an election promise".

My wife reports that she's being approached for loans by local university-students, within weeks of their starting to study away from home, not a good sign.

I'm never approached for loans, but then I'm also not a loan shark in the business for loans.

[trogers]

We are sitting on a bubble economy.

1. Retirees invested their whole life savings in pension funds, mutual funds and in stock market and on holidays. All started collapsing now. No more holidays.

2. Middle class working for big companies and invested their savings in shares and all plunged now. Most of their wealth have been wiped out.

3. Giant capitalist invested on natural resources like oil, metal and rare earth commodities and waiting for the price going up depends on China's growing demand.

The concept is how long the machines can produce things when humans have no money buy and no people to spend the money ? We are all sitting on a false economy with bundle of papers called currency.

It is like everyone wanted to eat good and delicious food. But there is no one out there to work on fields to produce the food, and no one is ready to cook on hot stove but wanted to eat delicious food.

One day we all have to go back to the fields and work hard for our food, rather than counting the papers and numbers on the screen.

All a consequence of global deflation...

[worgeordie]

The outlook for the 2nd half will be dire, *another day older ,and deeper in debt*

remember that song,applies to Thailand today,the wages are not enough for

peoples aspirations,must have it and have it NOW,even if it means I can never

pay for it.never mind I am sure the Govt. will be there to help them !

Regards Worgeordie

[Bakseeda]

We are sitting on a bubble economy.

1. Retirees invested their whole life savings in pension funds, mutual funds and in stock market and on holidays. All started collapsing now. No more holidays.

2. Middle class working for big companies and invested their savings in shares and all plunged now. Most of their wealth have been wiped out.

3. Giant capitalist invested on natural resources like oil, metal and rare earth commodities and waiting for the price going up depends on China's growing demand.

The concept is how long the machines can produce things when humans have no money buy and no people to spend the money ? We are all sitting on a false economy with bundle of papers called currency.

It is like everyone wanted to eat good and delicious food. But there is no one out there to work on fields to produce the food, and no one is ready to cook on hot stove but wanted to eat delicious food.

One day we all have to go back to the fields and work hard for our food, rather than counting the papers and numbers on the screen.

Wake up..!!!!!!

[jonclark]

Just one question - what is a nano-financing scheme as mentioned in the OP?

[Pib]

Just one question - what is a nano-financing scheme as mentioned in the OP?

http://www.nationmultimedia.com/business/BOT-considers-nano-financing-for-grass-roots-peopl-30246202.html

[Thai at Heart]

We are sitting on a bubble economy.

1. Retirees invested their whole life savings in pension funds, mutual funds and in stock market and on holidays. All started collapsing now. No more holidays.

2. Middle class working for big companies and invested their savings in shares and all plunged now. Most of their wealth have been wiped out.

3. Giant capitalist invested on natural resources like oil, metal and rare earth commodities and waiting for the price going up depends on China's growing demand.

The concept is how long the machines can produce things when humans have no money buy and no people to spend the money ? We are all sitting on a false economy with bundle of papers called currency.

It is like everyone wanted to eat good and delicious food. But there is no one out there to work on fields to produce the food, and no one is ready to cook on hot stove but wanted to eat delicious food.

One day we all have to go back to the fields and work hard for our food, rather than counting the papers and numbers on the screen.

All a consequence of global deflation...

Which China has been exporting around the world since the late 80s.

Fixing the yuan for so long at the wrong level has caused this problem. It caused the lending boom in the West fuelling 2008 and is now going to cause a massive problem.

There is no ammunition left to inflate the western economies. Hold onto your hats people. It's going to be rough.

[maoro2013]

28% creit card defaults is not alarming? When would it be alarming.

The figure of the increased household debt would not inlcude the debts owed to the private loan sharks either, these nare just as likely to have bloown out as well.

All might be sicker than this dismal report shows.

[mommysboy]

Great to see unemployment falling.

[does]

Does anyone know if "household debt" includes mortages for housing?

[Ricardo]

"all Thais will be rich after six months", pity it wasn't true, just "an election promise".

My wife reports that she's being approached for loans by local university-students, within weeks of their starting to study away from home, not a good sign.

I'm never approached for loans, but then I'm also not a loan shark in the business for loans.

Me neither, I find it despicable that the Thai mafia charge 30% per-month in our area, and you didn't mean to imply any such connection, of course.

IME anyone, who looks as though they might have the money, gets these approaches here.

But you're not approached, that's good, as turning desperate people down tactfully isn't always easy.

My point was, that many people who ought to be more-aware financially, are often lacking in the common-sense and thrifty approach, which we farangs are perhaps more familiar with.

Edited August 25, 2015 by Ricardo

[Pib]

28% creit card defaults is not alarming? When would it be alarming.

The figure of the increased household debt would not inlcude the debts owed to the private loan sharks either, these nare just as likely to have bloown out as well.

All might be sicker than this dismal report shows.

I expect it does not mean a 28% credit card default rate, but that it has increased by 28% from some reference value. Say the default rate value was 2.35%....if it increased to say approx 3% that represents a 28% increase as 28% of 2.35 is 0.66....add 0.66 to 2.35 and you get 3.01%.

Below is a quote from the article and I expect above example is what the 28% statistic really is. Kinda like how a company might report a 20% increase in profit from last year...profit last year was 1 dollar per share...it increased to 1.20 dollar per share which is a 20% increase.

But significantly credit card defaults also increased to 28%, though still not yet reaching alarming rate, but need close monitoring of defaults, he said.

[BuaBS]

Does anyone know if "household debt" includes mortages for housing?

If it doesn't ....that's 160.000 B /Thai. A lot of money for their car/motorsai & smartphone.

[maoro2013]

No doubt you are right PIB but the reporting is poor. It should say "increased by 28%" not "increased to 28%"

[konying]

Not sure if I understood correctly , but the nano financing is to let those who can not afford to pay their loans to borrow more?

[cloudhopper]

No doubt you are right PIB but the reporting is poor. It should say "increased by 28%" not "increased to 28%"

As correctly stated in the photo caption. Nonetheless an alarming number. Lots of informal credit will be wiped away too.

[MaxYakov]

Does anyone know if "household debt" includes mortages for housing?

If it doesn't ....that's 160.000 B /Thai. A lot of money for their car/motorsai & smartphone.

Don't forget the important items: cocktails, cream (whitening), cosmetic surgery, clothes and companionship - C⁵

Edited August 25, 2015 by MaxYakov

[amdy2206]

I'm not surprised about the credit card default level. Not sure what the usual borrowing rate is but Kasikorn charge 20% annual interest on their visa card. This has remained the same even after interest rates dramatically reduced. Admittedly people should use credit cards sensibly but many/most people borrowing that way think it is their own money and forget about paying it back with exorbitant rates. The customers are to blame but the banks must take a large proportion of the blame by allowing the distribution of the cards to people who really can't afford them, or understand the way they should be used. Admittedly is is a convenience which has to be paid for but the current interest rate does in no way reflect the current borrowing rates.

[does]

Amazingly unfunny, irrelevant, condenscending and ludicrous reply.

I looked it up - for those interested, this according to Wikipedia:

Household debt is defined as the amount of money that all adults in the household owe financial institutions. It includes consumer debt and mortgage loans. A significant rise in the level of this debt coincides historically with many severe economic crises and was a cause of the U.S. and subsequent European economic crises of 2007–2012

I am no economist but I would venture to say that mortgages make up the single biggest item in the total household debt. And I would assume there are substantial assets against the household debt in terms of housing equity.

Does anyone know if "household debt" includes mortages for housing?

If it doesn't ....that's 160.000 B /Thai. A lot of money for their car/motorsai & smartphone.

Don't forget the important items: cocktails, cream (whitening), cosmetic surgery, clothes and companionship - C⁵

[kiwikeith]

"all Thais will be rich after six months", pity it wasn't true, just "an election promise".

My wife reports that she's being approached for loans by local university-students, within weeks of their starting to study away from home, not a good sign.

When I went to imigration office the other day I had to wait 1 hour while 200 burmese got a 20 BHT visa renewal all guma gones on building sites, so if your Thai it is below u 2 work for 200 BHt a day.

[coulson]

I'm not surprised about the credit card default level. Not sure what the usual borrowing rate is but Kasikorn charge 20% annual interest on their visa card. This has remained the same even after interest rates dramatically reduced. Admittedly people should use credit cards sensibly but many/most people borrowing that way think it is their own money and forget about paying it back with exorbitant rates. The customers are to blame but the banks must take a large proportion of the blame by allowing the distribution of the cards to people who really can't afford them, or understand the way they should be used. Admittedly is is a convenience which has to be paid for but the current interest rate does in no way reflect the current borrowing rates.

Other smaller lending institutions too, too much easy money. But its ok, there's 167 million in the savings scheme...........jeez

15% is the maximum legal interest that an institution can charge for a loan, however they slip in administrative fee's at additional 13%, nice 28% total, equals the defaulting rate increase............there's a pattern there.

[Peterphuket]

Yes, and even now fuel has become cheaper.

[Srikcir]

Congratulations to Thai banks for encouraging more household debt:

“For the latter half of 2015, KTC [Krungthai Card Public Company Limited] will emphasize the expansion of its customer bases in major cities up-country as well as in areas of economic significance along the border. The target is to acquire another 400,000 customers.”

“The bank [uOB] issued up to 10,000 new credit cards per month during the first 5 months of this year [2015]. UOB is still likely to achieve its goal of issuing 120,000 new credit cards this year.”

And of course credit must be given to the current government:

“Meanwhile, a few government financial institutes maintained relaxed regulations for general-purpose loans, as part of the administration’s policy to help maintain spending in the private sector during the second quarter.” 2015-05-07

[puukao]

I bought an iphone 6 on Monday, but my gf took me to the mall and they said the iphone 6+ was WAY better......and it's better to buy 10.

we do this with every item...

and all day she yells at me for not having retirement, nice house, nice car....

ok, off to my english teaching job at 900 baht a month....

[FT10toLOS]

Doing my bit to help, ​cut up my GF's 4 credit cards today.

[elgordo38]

"all Thais will be rich after six months", pity it wasn't true, just "an election promise".

My wife reports that she's being approached for loans by local university-students, within weeks of their starting to study away from home, not a good sign.

Another nano idea.

[coulson]

Doing my bit to help, ​cut up my GF's 4 credit cards today.

Been there. It's a nice feeling. It's awkward afterwards though, when you explain that the term *help* meant advice....