Economist: Household debt nothing to lose sleep over

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BANGKOK, 27 October 2013 Thailand’s household debt of 79% of the current GDP, equivalent to about nine trillion baht, is not a concern despite the debt’s rapid rise during the past five year, said Dr. Thanawat Polwichai, an academic from the University of the Thai Chamber of Commerce. 

According to Dr. Thanawat, he did not deem the 79% household debt critical since most of the debt had been accrued over the years. Meanwhile, Bank of Thailand Governor Prasarn Trairatvorakul also expressed no concerns over the household debt increase, saying it had a tendency to drop after the government’s stimulus measures ended. However, he warned that household debt would rise again if the government stimulated spending in order to create future economic growth.

The Bank of Thailand earlier reported that the country’s household debt had rapidly increased during the past five years from 50% of the GDP to 79% of the GDP.

UBS, an investment banking in Europe, has warned that the high household debt in Thailand might trigger a sub-prime mortgage crisis.