Kasikorn predicts household debt to GDP could rise to 90 per cent

Amid the economic downturn, Thai household debts could rise to 90 per cent of gross domestic product (GDP), according to Kasikorn Research.

They said that household debts could become more fragile due to the COVID-19 outbreak situation.

The research house predicted earlier that the country’s GDP during the second quarter could shrink by as much as 18.5 per cent, and for the full year, it could see a double-digit decline.

The ratio of household debt to GDP soared up to 80 per cent in the first quarter of 2020. It shows that the household sector is struggling to cope with lowered income and rising loans.

Kasikorn Research said Thailand’s household debts are also likely to surge up to 88-90 per cent to the GDP in 2020 due to the economic recession coupled with the debt relief measures. As a result, the household level has not seen much reduction.

Data from the Bank of Thailand shows that the amount of household debts has been increasing year by year:

BOT’s data on household loan.

2014 – 40,993,963 million baht

2015 – 43,503,364 million baht

2016 – 45,489,521 million baht

2017 – 47,251,530 million baht

2018 – 49,942,675 million baht

2019 – 52,788,457 million baht

2020 (only Q1) – 13,479,196 million baht

However, Thailand is not the only country with a high level of household debts. Many Asian countries are facing debt problems as well.


2014 2015 2016 2017 2018
Indonesia 17.06 16.80 16.98 17.04 17.01
Malaysia 67.89 69.74 69.14 66.22 68.02
Myanmar 1.60 1.57 2.15 2.19 1.90
Thailand 79.73 81.16 79.59 78.32 78.62

Household debt, loans and debt securities (% of GDP) ©IMF, 2020

But for the number to rise up to 90 per cent, it shows that increasing debts in the private sector are due to the severe impact of the Thai economic recession.

The debt relief measures and the debt restructuring for retail customers will be the main objectives for commercial banks to help maintain the repayment ability of households and push the economy to recover.

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