Thai household debt deeper than ever

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Re: Thais deeper in debt due to govt policies

Post by buksida » Fri Sep 04, 2015 7:10 am

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
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Re: Thais deeper in debt due to govt policies

Post by buksida » Mon Jun 26, 2017 9:06 pm

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
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Re: Thai household debt deeper than ever

Post by bannsupaporn » Mon Jun 26, 2017 10:32 pm

"Live and Let Live" just be here now, Have a nice day.

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Re: Thai household debt deeper than ever

Post by Spitfire » Tue Jun 27, 2017 6:49 pm

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.
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Re: Thai household debt deeper than ever

Post by buksida » Thu Jun 07, 2018 8:38 am

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/
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Re: Thai household debt deeper than ever

Post by Big Boy » Thu Jun 07, 2018 9:21 am

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.
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Re: Thai household debt deeper than ever

Post by buksida » Thu Aug 30, 2018 5:45 pm

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
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Re: Thai household debt deeper than ever

Post by caller » Thu Aug 30, 2018 10:22 pm

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.
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