BoT concerned over household debts

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BANGKOK, 25 July 2011  – The Bank of Thailand (BoT) is concerned over household debts as the figure is skyrocketing and may affect the Thai economic stability.

BoT Assistant Governor for Monetary Policy Group Paiboon Kittisrikangwan elaborated that the BoT is closely monitoring factors affecting the Thai economic stability, especially household debts and soaring product prices caused by rising oil prices, which will affect inflation and purchasing power.

The assistant governor noted that the BoT will continue keeping a close eye on people’s spending and debts because it does not want people to accumulate debts until they are unable to pay them.

Consumer and personal loans in the past several years had been growing continuously. Loans on consumer products in June 2011 expanded 17%, which was close to the previous month. This caused the BoT to be getting worried about the ability of people to pay their debts.

Mr Paiboon explained that usually when the economy expands well, loans will be growing very fast. And if the new government aims to stimulate short-term spending, the situation will drive domestic spending to expand even further.