Thais have record high household debts, 66% admit to missing at least 1 installment payment as economy slows

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Nearly all participated households with a combined income of 50,000 Baht per month are carrying an average debt of over 500,000 Baht per household, the highest average on record, according to a survey that was released by the University of the Thai Chamber of Commerce (UTCC) on Thursday.

The survey was done by the UTCC’s Center for Economic and Business Forecasting (CEBF) with a sample size of 1,350 households, where the majority of each surveyed household has a combined income of more than 50,000 Baht per month, and it was conducted between August 15 and 20, 2022.

The center also expects Thailand’s household debt to reach 89.3% of its gross domestic product (GDP) or 14.97 trillion Baht, the highest in 16-year of record, by the end of 2022.

“99.6% of the sample size have debt and most of them were personal and credit card loans which were used to buy mainly consumer goods and durable goods such as vehicles and residences. Some of them also have business debt,” said Associate Professor Dr Thanawat Pholvichai, rector of the university and advisory chairman of the CEBF.

“The average debt was 501,711 Baht per household which was the highest on record,” he said.

Thanawat said most of the debts or 78.9% of them are debts within the financial system and the average monthly installment is 12,801 Baht per household.

He said that 65.9% of the indebted households also have missed at least one installment payment this year because of lowered income and higher living costs.

The CEBF said that the main factors causing the chances of defaulting on debt include:

  1. Decrease in income/income.
  2. The economy is not good.
  3. The cost of living is inconsistent with income.
  4. Business/household liquidity problems
  5. The impacts of the COVID-19 epidemic

The CEBF recommended the government provide more soft loans, create more public awareness on how properly manage their spending and debts and provide more training workshops to enhance people’s career skills.

As for the level of the total household debt, Thanawat said a high level of 80-90% household debt to GDP is not that concerning because around 79% of it was incurred within the financial system.

However, the high level of household debt could affect the economic recovery.

According to the National Economic and Social Development Council, the number of household debt was 89.3% of the GDP in the 3rd quarter of 2021.

The NESDC said Thailand’s economy is recovering because of exports growth, the return of tourists and strong domestic demand. However, inflation is hovering at nearly 14-year high of 7.61% in July which is hampering people’s purchasing power.


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