Connect with us

Business

Thailand’s Household Debt Steadily Increasing to Dangerous Levels

Thailand is now a top-ten highest household debt country among 89 countries worldwide and third highest among 29 Asian countries.

Avatar of CTN News

Published

on

BANGKOK – Thailand’s household debt has steadily increased to 78.6% of the country’s gross domestic products (GDP). According to figures from the National Economic and Social Development Council.

A study by the Bank of Thailand reports that Thais get into debt in their 20s and tend to borrow more as they age.

Their level of their debt is maintained not lowered even as they approach retirement.

Speaking at the Bangkok Sustainable Banking Forum, Bank of Thailand governor Veerathai Santiprabhob, highlighted common challenges facing the Thai society.

Thais have more personal household debt, the median average debt obligation for each person doubled from Bt70,000 in 2010 to Bt150,000 in 2016. The Bank of Thailand reported, almost 16%, or 3 million Thais, have debt payments which are 90-days  past due.

Over the past few years, heightened competition in the real estate along with rising property prices, has led to aggressive sales and promotional campaigns by property developers.

Seeing opportunities, some banks significantly relaxed their lending standards for mortgages.

This created perverse incentives like cash back for individuals to buy homes.

Household Debt as % of GDP for Asian Nations

householddebt asia

These increasingly lax mortgage lending standards by banks have in part worsened the household debt situation in Thailand.

To curb these loans the Bank of Thailand recently mandated financial institutions to assess each borrower’s ability to repay a loan based their debt-service ratio.

Without better credit controls, it will be difficult for the Thai financial institutions to limit the worsening of household debt.

Trapped in a debt cycle, indebted household often don’t have sufficient financial literacy or spending discipline.

Source: Thailand Business News

Continue Reading

CTN News App

CTN News App

české casino

Recent News

BUY FC 24 COINS

compras monedas fc 24

Volunteering at Soi Dog

Find a Job

Jooble jobs

Free ibomma Movies