The household debt ratio in Thailand was the third largest in Asia in the third quarter of 2016, according a Bank of Thailand unit.
The Puey Ungphakorn Institute for Economic Research found Thailand’s household debt was at 71.2% of gross domestic product while the ratio was 123% in Australia and 91.6% in South Korea.
Sommarat Chantarat, head of the financial system section, and Atchana Lamsam, head of networking and communications at the institute, revealed the findings on Monday.
One-third of all 69 million Thais borrowed from formal lenders -- banks and financial institutions. The average per-capita debt was 150,000 baht, excluding educational loans, cooperatives loans and non-formal loans.
The number of debtors has also risen steadily since 2009 in line with per-capita household debt.
Importantly, Thais became indebted at a young age and half of new workers were indebted, the study found.
Those of the retirement age of 60-80 also found their debts did not decrease.
Most of the debts are personal loans (17%), cars and credit cards (9%) and home loans (4%).
The study also found young workers were the largest non-performing loan group, with one in five of 19.3 million borrowers aged 29 defaulted on their loans.
The study pointed out the trend was worrisome. The fact that young workers were quick to become indebted and didn’t repay them could affect the overall financial stability.
Moreover, defaulting on personal loans will make it hard for them to get other types such as home or car loans, it said.