Thai household debt deeper than ever

Local Hua Hin and regional Thailand news articles and discussion.
User avatar
buksida
Moderator
Moderator
Posts: 22477
Joined: Tue Dec 31, 2002 12:25 pm
Location: south of sanity

Re: Thais deeper in debt due to govt policies

Post by buksida »

Average household debt this year the highest in ten years
Thai households have an average debt of 248,004 baht each this year which represents an increase of 13.16 percent of last year’s average of a 219,158 baht which is the highest in ten years, according to a poll result of the University of Thai Chamber of Commerce.

Mr Thanawat Pholvichai, director of the economic and business forecast centre of the UTCC, said Thursday that the poll result came from an opinion survey of 1,200 households during August 20-28.

Of the average household debt of 248,004 baht this year, 48.7 percent are organized debt and the rest are unorganized debt, said Mr Thanawat, pointing out that the increased household debt reflected the economic slowdown in the past three years which has affected household revenues.

He explained that the fact that households were indebted to unorganized lenders more than to organized lenders because they had limited access to organized source of funding.

The causes of increased household debts range from lower incomes, increased cost of living, poor farm harvests, increased spending through credit cards to increased tuition fees of their children, gambling and excessive spending on hire purchases.

The survey shows that 87.8 percent of the debtors have problem of debt servicing; average household debt repayment amounts to 14,033 baht per month, representing an increase of 5.06 percent from last year’s 10,752 baht.

http://englishnews.thaipbs.or.th/averag ... -ten-years
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
User avatar
buksida
Moderator
Moderator
Posts: 22477
Joined: Tue Dec 31, 2002 12:25 pm
Location: south of sanity

Re: Thais deeper in debt due to govt policies

Post by buksida »

Thai household loan rate third highest in Asia
The household debt ratio in Thailand was the third largest in Asia in the third quarter of 2016, according a Bank of Thailand unit.

The Puey Ungphakorn Institute for Economic Research found Thailand’s household debt was at 71.2% of gross domestic product while the ratio was 123% in Australia and 91.6% in South Korea.

Sommarat Chantarat, head of the financial system section, and Atchana Lamsam, head of networking and communications at the institute, revealed the findings on Monday.

One-third of all 69 million Thais borrowed from formal lenders -- banks and financial institutions. The average per-capita debt was 150,000 baht, excluding educational loans, cooperatives loans and non-formal loans.

The number of debtors has also risen steadily since 2009 in line with per-capita household debt.

Importantly, Thais became indebted at a young age and half of new workers were indebted, the study found.

Those of the retirement age of 60-80 also found their debts did not decrease.

Most of the debts are personal loans (17%), cars and credit cards (9%) and home loans (4%).

http://www.bangkokpost.com/business/fin ... st-in-asia
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
bannsupaporn
Rookie
Rookie
Posts: 22
Joined: Sun Feb 26, 2017 11:52 pm

Re: Thai household debt deeper than ever

Post by bannsupaporn »

"Live and Let Live" just be here now, Have a nice day.
User avatar
Spitfire
Addict
Addict
Posts: 5248
Joined: Thu Apr 10, 2008 1:17 pm
Location: Thailand

Re: Thai household debt deeper than ever

Post by Spitfire »

Let them make it worse and 'screw the pooch', then the baht will plummet and stop being over-valued so the Chinese-Thais will no longer be able to tell the BoT to manipulate the currency so they can invest overseas.
Resolve dissolves in alcohol
User avatar
buksida
Moderator
Moderator
Posts: 22477
Joined: Tue Dec 31, 2002 12:25 pm
Location: south of sanity

Re: Thai household debt deeper than ever

Post by buksida »

MOST THAIS THINK ECONOMY BAD, GETTING WORSE
A majority of the public thinks the economy is heading in the wrong direction as consumer confidence slipped slightly last month due to anxieties over rising costs and political uncertainty, according to survey data out Tuesday.

The University of the Thai Chamber Commerce reported over half of people surveyed felt the current economic situation is poor despite government reports it expanded at the fastest rate in five years during the first quarter.

“Political anxiety, as the election has been postponed to February 2019, impacts the people and investors’ confidence,” said Thanavath Phonvichai, director of the Center for Economic and Business Forecasting. “Whether the cabinet reshuffle will affect confidence depends on which minister will be in charge, if people have confidence that a new person is capable of continuing ongoing policies.”

Thanavath referred to rumors that junta chairman and Prime Minister Prayuth Chan-ocha may reshuffle his cabinet a fifth time.

The chamber of commerce report also identified unfavorable indicators such as a recent spike in petrol prices which “imposes a negative psychological impact,” as well as higher costs of living and commodities.

http://www.khaosodenglish.com/news/busi ... ing-worse/
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
User avatar
Big Boy
Moderator
Moderator
Posts: 44954
Joined: Fri Nov 04, 2005 7:36 pm
Location: Bon Kai

Re: Thai household debt deeper than ever

Post by Big Boy »

I've lived here over 6 years now, and in that time, I've barely seen Thai wages move. What I have noticed though is that prices in the shops have been creeping upwards.

To me, the big shift has been the massive increase in material goods, which must be leading to outrageous debt. The number of households with multiple cars/motorcycles. As an example, my neighbours don't earn a lot. In the 5 years since they moved in, they have bought 2 new cars and 4 new motorcycles - incredible debt. They have so many vehicles, they have to park some outside - why?

Another example is smartphones - who doesn't have one these days? OK, you can buy a half decent phone for around 6K these days, but that is a huge amount of money to a working class Thai. Then there is networking costs - probably cost at least one day's wage a month multiplied by number in the household - kids won't be earning.

Air conditioning - an essential for many Farangs, but used to be a luxury for working class Thais. Now you see banks of aircon units outside even small homestays and the outrageous power costs that go with them.

We have a thread on the effects of colonisation. I'm not sure if this is the effect of a backward country being affected by a lot of Western world people living here. Has the green eyed monster taken over, or is it natural progression? I don't know. All that I know is it can't be sustainable - the debt amongst Thais has become out of control.
Championship Plymouth Argyle 0 - 1 Preston NE :cry: :cry: :cry: :cry:

Points 41; Position 18
User avatar
buksida
Moderator
Moderator
Posts: 22477
Joined: Tue Dec 31, 2002 12:25 pm
Location: south of sanity

Re: Thai household debt deeper than ever

Post by buksida »

As debt levels rise, more Thais struggle to keep up
Pimpa Panlao, 31, is struggling to pay off an 80,000-baht bank loan and spends a third of her income from selling women's accessories at a Bangkok market to repay the loan.

"Business is bad and it's very tough when you have debt," Ms Pimpa told Reuters, who used part of the loan to finance her business. She is not alone.

With a debt mountain of 12.17 trillion baht at the end of March, the equivalent of 77.6% of gross domestic product, Thai households are among the biggest borrowers in Asia and they are finding it increasingly difficult to keep up with payments.

In addition, their debt pain could increase because the central bank has signalled it is likely to follow other central banks around the world and raise interest rates from near-record lows.

Non-performing mortgages, defined as those that have not been serviced in more than three months, were 3.39% of total home loans at the end of the second quarter, the highest level since the end of the global financial crisis in 2009.

Auto loans that have been delinquent for one to three months rose to 7.25% at the end of June, the highest since September last year, and compared with 6.97% at the end of March.

Private consumption is a critical element driving the Thai economy, accounting for half of its $490 billion GDP.

Consumers continued to borrow at a robust pace in the second quarter, when overall consumer debt rose 8% from a year earlier. That included a 6.2% rise in mortgage loans and a 12.4% jump in car loans.

But the risk is that an increasing debt burden will drag on Southeast Asia's second-largest economy.

Full story: https://www.bangkokpost.com/business/ne ... to-keep-up
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
User avatar
caller
Hero
Hero
Posts: 10957
Joined: Sat Jun 04, 2005 6:05 pm
Location: Hua Hin

Re: Thai household debt deeper than ever

Post by caller »

The economy is also affecting the consumer spending of the more affluent as well. The glitzy high end malls of Bangkok may still get ram packed, but many shops are struggling and get discounted rents based on sales. Some retail companies from abroad have pulled out of Thailand altogether.

I visit MegaBangna from time to time and it's a Mall that is always heaving at weekends, albeit not perceived as a high end store. I don't know how many here have visited, but it's massive and expanding. Under the one roof it has a typical IKEA and a huge Big C, Homepro and Robinsons. Plus shops I have never visited there, which I assume would be pretty large, including TOPS. The other week, when it was raining, we had to get out of my other halfs condo in Bkk as the leccy was being turned off for most of the day for some reason of other and as I wanted to go to IKEA for something, that's where we headed.

We got there before the official opening time, but already most seating areas inside the Mall were full. My other half said people come just for the aircon? Then I noticed the Camel store had shut. It was a good store because of it's size, that carried a really full range and I have bought various items from there (I like Camel). Then I noticed the clothes shops nearby all had very generous sales, some up to 80% off and it made me think about what all the people there were actually doing or has the Mall simply become a destination in it's own right? Bearing in mind the huge number of food outlets, food courts, outdoor Thai style markets and so on, rather than folk going there because they actually want to buy something, or at least something over and above what they would normally buy?

I also know someone up in Korat who runs a high end spa, catering for the better off Thai ladies as customers. I learnt when I was last there that business has fallen across all such similar spas, primarily as such luxury spending was deemed a luxury too far, so visits were less frequent or were cut altogether.

I think Thailand has got itself into the same GDP quandary that Osborne misunderstood before Brexit. And that is if the extra money in the food chain is not filtering downwards, it's actually meaningless to ordinary people and that seems the case here as well.
Talk is cheap
User avatar
buksida
Moderator
Moderator
Posts: 22477
Joined: Tue Dec 31, 2002 12:25 pm
Location: south of sanity

Re: Thai household debt deeper than ever

Post by buksida »

Credit inquiries climbing as household debt swells
Credit inquiries at the National Credit Bureau (NCB) are expected to hit another record high this year amid mounting anxiety over swelling household debt.

The number of credit inquiries for existing borrowers is estimated to reach 60 million this year after 12.6 million were made during the first three months, said NCB chief executive Surapol Opasatien.

Increasing household debt has stoked demand for credit reviews to check debtors' payment ability, he said.

Last year, inquiries for credit reviews set a record at 54 million transactions, up from 43.9 million in 2017, 42.2 million in 2016, 32.7 million in 2015, 28.1 million in 2014, 16 million in 2013 and 6.58 million in 2012.

Credit inquiries for new loans are also expected to set a record in 2019 after tallying 16 million last year, Mr Surapol said.

...

Thailand's household debt amounted to 12.6 trillion baht and represented 77.8% of the country's GDP at the end of last September, according to central bank data.

Household debt rose 5.9% year-on-year, faster than the economic growth rate of about 4%.

https://www.bangkokpost.com/business/ne ... ebt-swells
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
User avatar
buksida
Moderator
Moderator
Posts: 22477
Joined: Tue Dec 31, 2002 12:25 pm
Location: south of sanity

Re: Thai household debt deeper than ever

Post by buksida »

Rising household debts could impact consumer spending
HOUSEHOLD DEBTS are on the rise and could suppress consumer spending as well as people’s ability to repay their debts, the state think-tank National Economic and Social Development Council (NESDC) warned yesterday.

Household debt in the fourth quarter of last year rose 6 per cent to Bt12.8 trillion or equivalent to 78.6 per cent of gross domestic product (GDP). Debts in the first quarter of this year have been on the rise as consumer loans have hit a 10.1 per cent increase, a record high in five years, NESDC secretary-general Thosaporn Sirisumphand said.

“Debts below 80 per cent of the GDP is an acceptable level, but must be closely monitored,” he said.

http://www.nationmultimedia.com/detail/ ... s/30370686

Oh, its below 80% ... that's okay then ...
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
HHTel
Hero
Hero
Posts: 10807
Joined: Mon Feb 12, 2007 7:44 pm

Re: Thai household debt deeper than ever

Post by HHTel »

I don't think the UK has been below 80% for a very long time. It's currently at 87%.
User avatar
buksida
Moderator
Moderator
Posts: 22477
Joined: Tue Dec 31, 2002 12:25 pm
Location: south of sanity

Re: Thai household debt deeper than ever

Post by buksida »

I know but this thread is about Thailand which is where we live.

What would be interesting is to see the debt/loan breakdown - how much for mortgages, car loans, land, business loans, new iPhones etc. You do notice everyone driving around in a spanking new car regardless of what they're earning.
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
HHTel
Hero
Hero
Posts: 10807
Joined: Mon Feb 12, 2007 7:44 pm

Re: Thai household debt deeper than ever

Post by HHTel »

It was said that under 80% is acceptable which needed a comparison to put it into perspective. I know the thread is about Thailand but without such comparisons, the figures are meaningless.
User avatar
Big Boy
Moderator
Moderator
Posts: 44954
Joined: Fri Nov 04, 2005 7:36 pm
Location: Bon Kai

Re: Thai household debt deeper than ever

Post by Big Boy »

I know Thais who borrowed double what the house cost, and since moving in, they've bought??? 2 new cars and 7 motorcycles - I think they see it as a sign of wealth. The fact is they don't have 2 Baht coins to rub together. The question is, how do they get this unsecured credit in the first place?
Championship Plymouth Argyle 0 - 1 Preston NE :cry: :cry: :cry: :cry:

Points 41; Position 18
User avatar
Nereus
Hero
Hero
Posts: 10869
Joined: Tue Jan 02, 2007 3:01 pm
Location: Hua Hin and Bangkok

Re: Thai household debt deeper than ever

Post by Nereus »

Central bank mulls auto loan curbs

https://www.bangkokpost.com/business/fi ... loan-curbs

The Bank of Thailand could implement new measures to supervise auto loans in a bid to control the country's elevated household debt.

If the central bank's examination team finds auto lenders are using relaxed loan criteria, it could adopt new measures to control the loan quality of this business segment, said governor Veerathai Santiprabhob.

The central bank began the examination after finding several marketing campaigns displaying eased criteria for auto loan approvals, especially cashback and top-up loan incentives.

Somchai Lertlarpwasin, senior director of the financial institutions strategy department, said the central bank's examination of auto loans is expected to be completed by June after beginning in the first quarter.

Auto loans rose 12.6% year-on-year last year, up from 8.4% in 2017, according to central bank data.
Non-performing loans in the auto segment increased to 1.66% year-on-year in 2018, up from 1.6% logged in the previous year.

Such campaigns are similar to those of mortgage loans, where the central bank has issued a new loan-to-value (LTV) regulation to control asset quality in the property sector.

The new LTV regulation for housing loans became effective on Monday.

The new measures call for a minimum down payment for third and subsequent mortgages of 30% of the home price, while the minimum down payment for a second housing loan is 10-20%, depending on how long a borrower has made payments on the first mortgage.

"New LTV regulations for mortgages, which came into effect on Monday, will not have an impact on first-time homebuyers who have real housing loan demand," said Mr Veerathai.

"This will help control asset quality of the housing loan segment and the country's household debt."
Thailand's household debt rose to 12.8 trillion baht in last year's final quarter, up from 12.5 trillion registered in the third quarter, according to central bank data.

The latest household debt figure stands at 78.2% of GDP on a seasonally adjusted basis.

The central bank has been closely monitoring the household debt situation as debt burdens will take a toll on consumers' purchasing power and long-term economic growth, said Mr Veerathai.

The central bank also tightened regulations governing unsecured financing, covering both credit cards and personal loans, from last year as instruments for controlling elevated household debt.

Predee Daochai, chairman of the Thai Bankers Association and Kasikornbank president, said the debt-to-service ratio of a bank's loan product should be no more than 40% of total monthly income of a borrower.
May you be in heaven half an hour before the devil know`s you`re dead!
Post Reply