Thai household debts third highest in Asia

THE Puey Ungphakorn Institute for Economic Research (PIER) said today (June 27) that Thailand’s household debt is the third highest in Asia with newly-employed youths posting the most non-performing loans (NPLs), Thai News Agency said.

Sommarat Chantarat and Atchana Lamsam, research heads at PIER which is a semi-autonomous body within the Bank of Thailand, said their latest research shows that in the third quarter of 2016 Thai debt to GDP stood at 71.2% which is the third highest in Asia with Australia ranking first at 123% and South Korea coming next at 91.6 %.

Significantly one in three of Thailand’s total population of 69 million have formal debts at an average of 150,000 baht with this not including educational, cooperative and informal debts.

Moreover the number of people carrying debts has been increasing steadily since 2009 with the average debt per person also rising higher. Importantly, Thais are accumulating debts from a young age with 50% of newly-employed workers carrying debts.

This research also found that Thai retirees who despite being 60 to 80 years of age still carry debt burdens with the highest category being personal loans at 17% followed by auto and credit card loans at 9% and housing loans at 4%.

This research highlighted the point that young newly-employed workers post the highest amount of NPLs with 1 in 5 of 19.3 million borrowers of 29 years of age having bad loans.

The two research heads warn that if those of working age both pile up debts and post NPLs quickly, particularly personal loans, it could affect the stability of the financial system. This will also lead to it become difficult for them to borrow other categories of loans, such housing and auto, because of their bad credit.


Top: A man carrying heavy debts is broke. Photo: (CC-BY-2.0)



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