Household Debt Quarter 3/2020 from the Bank of Thailand indicates that Thailand has a high level of household debt and is expected to increase. As the economy is in decline By the proportion of kitchen debtIn Q3 / 2020 hit a new 18-year high of 86.6% per GDP (from 83.8% per GDP in 2Q2020), especially residential debt. Including large debts Like debt for the establishment of the archiAnd car leasing debt And consumer debt such as credit cards and personal loans
The KASIKORN RESEARCH CENTER said there is an increased likelihood that Thailand’s household debt share will rise above 90% per GDP by the end of 2020 and there is an opportunity to accelerate further in 2021 if the risks of A new outbreak of the COVID-19 virus The impact continued, causing the Thai economy to recover more slowly than many parties expected.
For debt for housing New home loans Still moving up about 1.60 billion baht, accounting for 88% of the increase in household debt, which in the third quarter of 2020 household debt has an outstanding amount of approximately 1.82 billion baht to 13.77 trillion baht. Baht There are also signs of debt formation in other areas. (Both large debt Such as occupational debt and car leasing debt And consumer debt (such as credit cards and personal loans) that accelerated in Q3 / 2020, due to a slowdown in the second quarter of 2020 due to the first round of COVID-19 outbreaks.
The financial vulnerability of the Thai household sector has gradually become more evident in light of the weakening signs of the Thai economy over the past several years. Overall, households in the country had the average monthly income lower than the decrease in monthly expenses. In contrast to the high debt burden While the level of savings in Thai households has been in a weaker situation before the COVID crisis.
The Kasikorn Thai Research Center found that while the average debt-to-income or DSR (Debt Service Ratio) of the entire country is approximately 27.0%, but households in the low-income group Or have an average income of not more than 10,000 baht per month to have a high DSR. And several times higher than the average DSR of the entire country. In particular, households in the lower income group of 5,000 baht per month had a DSR of 84%, while households in the income group between 5,000-10,000 baht per month had approximately 40% DSR. Financial tightness and vulnerability to economic problems and the COVID-19 crisis. That erupted in 2020
While 2021 is at risk of COVID-19. A new wave in the country This affects the pace of economic recovery in 2021 and is likely to affect the financial status of the retail debtor group that had been assisted by financial institutions. (Both non-bank and specialized financial institutions), in total, there are approximately 10.68 million accounts, accounted for approximately 3.5 trillion baht (data from the Bank of Thailand). As of Oct. 2020)
Kasikorn Research Center views that Although preliminary data before the new coronavirus-19 reflects that most commercial banks’ retail debtors are likely to return to normal debt repayment after the measure expires. And some debtors have already been rescued by debt restructuring. But the risk situation of the Thai economy must be closely monitored in early 2021 as it has a direct implications for household income flows and debt servicing capability.
Kasikorn Research Center estimates that There is a possibility that Thai household debt could rise to 91.0% per GDP or even higher. If the economy is more affected by COVID than estimated And resulting in GDP growth in 2021 less than the underlying case of 2.6%
In this regard, the picture of household debt remained consistently high. It is one of the indicators that underscores the structural problems of the Thai economy. And the vulnerability of the household financial status that is awaiting resolution Continued from the control of the COVID outbreak and the recovery of the Thai economy back to normal. While the more important task is to provide financial assistance measures for both business and household debtors to pass through this difficult time.
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