BANGKOK, July 28 — Skyrocketing household debt in Thailand now has the highest expansion rate among Asian countries and investors are advised to monitor it closely, warned Sutapa Amornvivat, chief economist and executive vice president of Siam Commercial Bank, Thailand’s oldest private bank.
Household debt in Thailand stood at 82.3 per cent of gross domestic product at the end of 2013 and low-income earners with an average monthly income of less than 10,000 baht are responsible for most of the household debt, Ms Sutapa said.
Describing the situation as critical to Thailand’s economy, which is recovering as it depresses domestic consumption, Ms Sutapa said prices of agricultural produce are still low. This is despite the state injection of funds into the system such as paying about Bt90 billion to farmers who had sold rice to the government under the now scrapped rice-pledging programme, .
A number of private companies have stopped overtime pay for their staff, she said. And household debt remains very high.
Domestic consumption has bottomed out and should recover if the public’s confidence improves as projected, she said.
Meanwhile, Thanawat Polvichai, director of University of Thai Chamber of Commerce’s Economic and Business Forecast Centre, said that Thailand’s economy could expand between 4-5 per cent during the second half of 2014 due to improving domestic politics.
Dr Thanawat said the state was able prepare its budget expenditure plan for fiscal 2015, starting October 1, in time, and that the domestic economy would recover due to rising private investment.
The tourism industry is also projected to improve because of the current peace.
Thailand’s exports this year are projected to grow about 3 per cent due to the recovery of the global economy, he said, adding that that the Centre has forecast that the country’s economy would grow more than two per cent.