Household debt surges 12%, highest in 5 years

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BANGKOK, 25 June 2013 The University of the Thai Chamber of Commerce (UTCC) says household debt of Thai people has increased by 12 percent from last year, the biggest jump in 5 years, while predicting that in the next 3 years, over one-third of the population will have more debts than earnings. 

According to Mr Thanawat Polwichai, Director of the Center for Economic and Business Forecasting of UTCC, the survey conducted on 1,200 people nationwide found that up to 64.6 percent of Thais are in debt. 40.5 percent of them have formal debts while 26.9 percent have informal debts, and 32.5 percent have both.

This year’s average debt per family, according to the study, amounts to nearly 189,000 baht, which is a 12 percent increase compared to the figure in 2012 and the highest expansion in the past 5 years.

The average debt repayment per month per family is at 1,680 baht. The survey showed that up to 70.6 percent have had difficulties repaying the due amount because of insufficient income, high interest rate and high living cost.

UTCC also predicts that in three years’ time, 36.4 percent of Thais will have more debts than earnings. This will in turn have a negative impact on the overall Thai economy as domestic consumption will slow down while informal debts will rise, especially among the poor.