BANGKOK, June 16 (Xinhua) — Thailand’s national economic planning agency on Tuesday told the media that the COVID-19 crisis has had a massive impact on household debt which may soar beyond 80 percent of gross domestic product (GDP).
Thai household debt stood at 79.8 percent of GDP in the first quarter of this year, said in the June report issued by the National Economic and Social Development Council (NESDC).
“The pandemic resulted in businesses shutting down in addition to the drought already having hit households hard, leading to increased borrowing of money as incomes declined,” said NESDC secretary-general Thosaporn Sirisumphand.
Thosaporn also said that the economic impact will be severe in the second quarter, as many businesses have laid off workers, or cut their employees’ salaries.
The official also said that consumer loans have expanded 7.5 percent in the fourth quarter of last year.
While overall GDP value has dropped to 15 trillion baht (482.2 billion U.S. dollars) this year from 16 trillion baht (514.4 billion U.S. dollars) last year, household debt is expected to surpass 80 percent of GDP this year, he warned.
Consumers also used personal loans for doing businesses, estimated to be 17.9 percent of total personal loans, which include hire purchase, auto loans and mortgage, he said.
The NESDC report indicated that non-performing loans arising from consumption loans is about 3.23 per cent of total consumption loans, up from 2.9 per cent in the fourth quarter of last year.
Bad debts amounted to 156 billion baht (5 billion U.S. dollars), he added.
Thai household debt totaled 13.47 trillion baht (433 billion U.S. dollars) in the fourth quarter of last year, up 5 percent but down from 5.5 percent in the previous quarter.
The debt-to-GDP ratio was 79.8 per cent, the highest in 14 quarters.
The report said debt-to-GDP is expected to surpass 80 percent of GDP this year. Enditem