Thailand is experiencing a steady increase in household debt, particularly in auto loans and debts from savings cooperatives, according to the secretary-general of the National Economic and Social Development Council.
- Thailand’s household debt is continuing to increase, with a 3.6% rise in the first quarter of 2023, highlighting the need for close monitoring of auto loans and debt from savings cooperatives.
- Non-performing loans (NPLs) in the country have reached 2.68%, with a concerning increase of 30.3% in NPLs from auto loans, indicating a growing risk of bad debt.
- Financial literacy and access to financial services for Thai people have decreased compared to 2020, emphasizing the importance of providing education on borrowing, finance, and debt management.
In the first quarter of 2023, household debt reached 15.9 trillion baht, a 3.6% increase from the previous quarter, or 90.6% of the GDP. Real estate purchases and personal loans were identified as the main contributors to this growth.
Non-performing loans (NPLs)
Another troubling aspect is the rise in non-performing loans (NPLs). Currently, the NPL rate in the country stands at 2.68%, which is a significant cause for concern. Of particular note is the 30.3% increase in NPLs from auto loans, indicating a growing risk of bad debt in this sector.
Despite efforts to improve financial literacy, there has been a decline in financial literacy and access to financial services, exacerbating the household debt issue.
Auto loans and debts from savings cooperatives
One of the main contributing factors to this increase in debt is real estate purchases and personal loans. These types of loans have been identified as the primary drivers behind the growing debt burden on Thai households.
The increase in household debt in Thailand is a cause for concern, particularly when it comes to auto loans and debts from savings cooperatives. The first quarter of 2023 saw a 3.6% rise in household debt, reaching a total of 15.9 trillion baht, which is equivalent to 90.6% of the country’s GDP.
Furthermore, there has been a decline in financial literacy and access to financial services among the Thai population. Compared to 2020, people have become less knowledgeable…