Economic impacts from the COVID-19 pandemic continue to affect Thai people, who have since the start of the outbreak faced increasing living expenses. A new survey from the University of the Thai Chamber of Commerce (UTCC) suggests that almost every Thai household is indebted, mostly in the forms of credit cards and personal loans.
From the 1,350 households surveyed, mostly with an average household income of more than 50,000 baht per month, the level of income falls below spending. The poll finds that 99.6% of the households surveyed are indebted, mostly in the forms of credit cards and personal loans taken out to purchase commodities, plus durable goods such as vehicles and houses. Some households took out loans to sustain business operations.
According to the UTCC, the average level of debt has reached a record high at 501,711 baht per household. Households surveyed primarily took out loans from legal sources, and were responsible for repayments at an average of 12,801 baht per month.
Most of the households surveyed at 65.9% reported missing their repayment schedules over the past year due to reduced income, poor economy, and the rising cost of living. They suggested the government provide low-interest loans, occupational training, and knowledge on debt management and financial discipline.
Mr. Thanavath Phonvichai, UTCC President and chief advisor of the university’s Center for Economic and Business Forecasting, said the outcomes of this survey suggest better access to formal loan sources among Thai people, as reflected in the proportion of loans from formal creditors, despite the overall increase in household debt. This indicates asset ownership among the population.
He said this record high household debt amount is caused by the economic situation and the rising cost of living. However, this situation is expected to start resolving early next year, provided the country continues to welcome more tourists, and its economy recovers at a rapid speed.
Mr. Thanavath said the non-performing loans (NPLs) situation is still worrisome, as financial institutes have been maintaining the interest rates, while the standard negotiations are still being practiced when it comes to debt collection. (NNT)