Thai households increasingly in debt

According to a poll, almost one Thai in two said they had credit card debts or a mortgage to pay. According to experts, easier access to low-interest credit is needed. The pandemic has made economic difficulties worse.

Bangkok (AsiaNews) – Thai households carry on average credit card and personal loan debt worth 1.24 million baht (about US$ 37,000) and the pandemic has made repayments more difficult, this according to a recent survey by Suan Dusit conducted between 22 and 25 November.

About 46.52 per cent of respondents said they owed money to credit card companies while 39.85 per cent had a mortgage to pay.

Civil servants have an average credit card debt of 1 million baht (US$ 30,000) per person, twice as much as private sector workers. However, the latter are most worried about their ability to pay back due to unemployment, job insecurity and low incomes.

According to Suan Dusit, households need greater financial discipline and debt restructuring by credit institutions, along with easier access to government-guaranteed low-interest credit.

The National Economic and Social Development Council (NESDC) reported that household debt amounted to 14.27 trillion baht in the second quarter, or 89.3 per cent of GDP, placing Thailand in 5th place in Asia and 12th out of the 70 most debt-affected countries.

“Household debt is likely to rise further as the economy has not fully recovered yet and the flood crisis is forcing families to take more loans,” said NESDC secretary general Danucha Pichayanan.

In addition to short-term factors, like the weather, borrowing is being driven by structural factors. Informal debt rose 1.5 times over 2019, “showing that some households are facing a liquidity shortage,” Pichayanan added.

• thailand
• economy
• household debt
• credit cards
• mortgages
• pandemic
• crisis
• flooding