Household debt hits record

Debts in the home jumped to a new high reflecting the rising cost of living and school payments, a survey by the University of the Thai Chamber of Commerce showed on Tuesday.

The Economic and Business Forecasting Centre of the university said the average household debt stood at 188,774 baht, up 12% in one year from 168,517 baht, and the highest level since the UTCC began the survey in 2008.

Families with income of under 5,000 baht a month led all groups in making new debt, fully half of it resulting from loans by loan sharks, followed by  households with the monthly income of between 5,000 and 15,000 baht, it added.

The centre said 23% of respondents pointed to the higher cost of living as the main reason for growing debt, while 22% said they needed cash to pay for school tuition, followed by home mortgage payments.

Thanavath Phonvichai, the centre director, said the results signal an economic downturn, as consumer purchasing power dwindles because of the high prices of goods. The two-digit increase of household debt was an alarming sign for the Thai economy, he added.

Consumers are likely to slow their spending for a few months, at least until the final quarter of the year, unless the government launches stimulus measures, he added.

The survey sampled 1,200 households across the country from June 18-23.

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