A jump in Thailand’s household debt level has meant that the country is now close to being amongst the top 10 countries worldwide with the highest ratio of household debt to gross domestic product (GDP). Household debt is defined as the combined debt of all people in a household. It includes consumer debt and mortgage loans. The current top 10 countries include the Nordic nations of Denmark, Sweden, and Norway which all, according to the Bank for International Settlements data, had a household debt to GDP of 87.7% in the second quarter of last year.
According to the central bank data, Thailand’s household debt level rose from 83.8% of GPD in the second quarter last year to 86.6% of GDP in the third quarter of last year. The number is amongst the highest in Asia as well as the highest level recorded since the data was made available in 2003.
The slow-moving economy and the pandemic can be the main attributes to the jump in Thailand’s domestic household debt and the new wave will most likely only add more financial pressure on the country. Local Banks have stopped extending new consumer loans so the population has little choice and many are pushed to borrow from informal lenders or loan sharks.
Kasikorn Research Center said that the problems need to be addressed as the household debt to GDP could easily reach 90% when fourth-quarter figures are released and if the pandemic continues to pressure the economy, that figure could reach 91% or more this year.
Read the full article from Bangkok post here