Average household debt has risen 7.4% so far this year an average of THB340,000 (US$11,250), according to the University of the Thai Chamber of Commerce.
The university said that average puts debt a new national high since data began being tracked, according to Thai News Agency, and overall amounts to 78% of the national GDP. Average household debt one year ago was just over THB316,000.
Nearly nine in 10 – 88.1% – of 1,201 people surveyed nationwide between Nov. 11 and Saturday said they faced some form of debt, university director Thanawat Polvichai said. Most of that was attributed to general spending such as vehicles loans, mortgages and credit cards – major contributors to the rise in household debt.
Higher debt-to-GDP ratios make a nation less attractive to investors, as it increases the risk of default.
Thanawat expressed his concern that the economic slowdown, exacerbated by the trans-pacific trade war’s impact on exports, combined with appreciation of the Thai baht are putting a greater debt burden on Thai households.
Earlier this month, the government downgraded its growth forecast, expecting 2019 to be the slowest in five years. It was the second downgrade this year. In May, government economists lowered their sights to 3.8% from 4.5%.
Weak Q3 puts Thai economy on slowest path in 5 years
With third-quarter results showing a meager 2.4% growth, government economists revised growth projections for this year to 2.6% overall – a sharp decline from last year’s expansion of 4.1%.
As a result of this, Thanawat said, it negatively affects people’s ability to earn, pay off their debts and have personal spending. He suggested that the government come up with more economic stimulus measures to stoke the economy by the beginning of next year.
Among his suggestions were policies implementing cost-control measures, taking steps to boost confidence among entrepreneurs and investors, as well as finding sources of income for the unemployed.
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