Thailand’s household debt reaches 16-year high

Thailand’s households are struggling with the highest level of debt in 16 years, according to a new survey by the University of the Thai Chamber of Commerce published on August 26. The situation is mainly owing to the prolonged Covid-19 pandemic and slow economic growth, the study determined. The survey, which was based on interviews with 1,350 respondents conducted between August 15 to 20, found that the debt comes mainly from asset purchases and stands per household at an average of 501,711 baht ($13,857) this year, up by 3.7 per cent from 483,950 baht in 2020 when the latest study…

Thailand’s households are struggling with the highest level of debt in 16 years, according to a new survey by the University of the Thai Chamber of Commerce published on August 26.

The situation is mainly owing to the prolonged Covid-19 pandemic and slow economic growth, the study determined.

The survey, which was based on interviews with 1,350 respondents conducted between August 15 to 20, found that the debt comes mainly from asset purchases and stands per household at an average of 501,711 baht ($13,857) this year, up by 3.7 per cent from 483,950 baht in 2020 when the latest study was conducted.

Almost 100 per cent of surveyed people in debt

“Some 99.6 per cent of respondents were in debt, which was incurred mainly from personal loans and credit cards as their income stagnated while expenses increased, driven by higher costs of living,” Thanavath Phonvichai, the university’s president, said.

“People’s borrowing objectives were for daily expenses, purchases of durable goods such as houses and vehicles and for doing business,” he said.

The study also found that each person had to pay a debt of 12,801 baht per month, while 65.9 per cent of the people surveyed admitted they had missed a debt payment because of Covid-19 related circumstances, the economic crisis and the inconsistency of income and expenses.

Hopes for improvement

Overall, latest data from the Bank of Thailand, the country’s central bank, revealed that Thailand’s household debts totaled 14.6 trillion baht ($378.4 billion) in the first quarter of this year, representing 89.2 per cent of the country’s gross domestic product.

However, Thailand’s household debt is likely to bottom out and gradually decrease in line with the expected economic recovery, Phonvichai said, provided that income from exports and tourism improves.