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Thai household debt expected to keep rising- Kasikorn Research

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Despite rolling out Covid-19 vaccines, in which could see a faster return to pre-Covid times, Thailand’s household debt is expected to keep rising. Kasikorn Research analysts say it could, in fact, reach 89-91% by the end of the year.

In a recent survey, KResearch says 10.8% of respondents could be stuck in a financial crisis. Of those who may be stuck, they indicated a drop in income, an inability to reduce expenses, and a high debt service burden per month that is exceeding 50% of their monthly incomes. This group of survey respondents is also concerned that it may not be able to provide for its basic needs in the near future.

In the 3rd quarter of 2020 and the year end, the figures were lower, at 86.6%, and 89.2% respectively. The upward trend isn’t unique as loans have increased while the economy has slowed. Almost 20% of household debts now are receiving financial-aid measures from financial institutions. The Bank of Thailand says the end of 2020 say 2.79 trillion baht tied up in financial relief programmes, which is equivalent to the 20%.

Despite government handouts and stimulus measures, the third wave of the pandemic is expected to increase outstanding debt under financial-aid programmes through the end of this month, but analysts say they are likely to not be any higher than the 3rd quarter of 2020. The amount of borrowers who may need further assistance after the relief programmes end in June 2021, is expected to be high.

The Covid vaccination rollout may give more flexibility in ending lockdowns in Thailand, funneling future financial assistance to those who are in serious need. The rollout may signal a switch from the standardized measures that were previously in place for determining who qualifies for financial aid, to a more individualised debt handling policy by financial institutions.

When asked what types of assistance are needed, survey participants ranked liquidity support at the top, followed by job creation that could help them maintain a stable revenue stream. Extension of financial-aid measures ranked 3rd. The rankings, indeed, point towards respondents needing to stabilize their platform of revenue first, before needing financial help.

SOURCE: Thai Enquirer

 

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8 Comments

8 Comments

  1. toby andrews

    Friday, April 16, 2021 at 4:26 pm

    Well one good result might be, if they have to sell their cars and motorbikes it might bring down the death toll on the roads.
    Poverty! They don’t know what poverty is.
    I remember when our butler ran off with cook, we had to answer the door ourselves and live off takeaways!

  2. Ben

    Saturday, April 17, 2021 at 7:22 am

    The expansion of credit has enabled people to live beyond their means. That has built up to the point where disaster is around the corner. In the USA people declare Chapter 7 bankruptcy and are in the penalty box for a while before they can repeat the process again. I’m not sure what the rules are in Thailand but I don’t think they can get out of their debts as easily.

  3. James

    Saturday, April 17, 2021 at 8:29 am

    Just print more baht and bring down its value. Much of Thailand is becoming poor value.

  4. Amy Sukwan

    Saturday, April 17, 2021 at 8:40 am

    Debts that can’t be paid, won’t be paid

  5. toby andrews

    Saturday, April 17, 2021 at 9:48 am

    Later matters become worse.
    The chauffeur ran off with the maid. We had to make our own beds and catch the bus!!!

  6. Simon Small

    Sunday, April 18, 2021 at 5:04 pm

    Exactly, @Ben. If only there was an easy solution that avoided people being hurt, but there isn’t.

  7. tony

    Sunday, April 18, 2021 at 7:22 pm

    worse still the bus never came because the driver was caught coming with the gardener

  8. Toby Andrews

    Sunday, April 25, 2021 at 5:10 pm

    @tony – and then the bus crashed and we had to walk ten miles in the pouring rain back to our Stately Home.

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Ann Carter is an award-winning journalist from the United States with over 12 years experience in print and broadcast news. Her work has been featured in America, China and Thailand as she has worked internationally at major news stations as a writer and producer. Carter graduated from the Walter Williams Missouri School of Journalism in the USA.

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