Household Debt in Thailand has Risen to a Record High

As the Thai Baht soars and the economy lags household debt in Thailand  has risen to a record high of 340,000 baht per household. According to a poll on household debt, conducted by University of the Thai Chamber of Commerce.

Thanawat Polvichai,  a director at UTCC said the poll was conducted among 1,201 respondents across the country.

The poll shows over 80% were in debt including car loans, housing loans and credit card debt.

Household debt in 2019 grew only 7.4% and 79.8 % of respondents got loans from financial institutions.

He said it was very worrying that the record high of household debt resulted from Thailand’s economic slowdown and the soaring Thai baht. The Thai economy is projected to grow 2.5 -2.6% this year. Lower than 3% for the first time in five years.

Slow economic growth affect people’s income, so they needed to seek loans for personal consumption expenditure.

He also suggested that the government put in place economic stimulus to revive Thailand’s economy.

Household debt also currently stands at about 78% of GDP, he added.

Outstanding balance of housing loans banks rose 7.8 percent in Q1 2019, while that of personal loans grew 11.3 percent.

Slower demand for homes means issuance of housing loans is likely to also decelerate. Especially on account of the recent restrictions on lending by financial institutions.

The central bank has unleashed a spate of regulations to curb household debt, including the imposition of tightened loan-to-value ratios on home loans.