NESDC alarmed on housing

NESDC alarmed on housing

Unemployment rate still low in Q2

The National Economic and Social Development Council is concerned over housing debts, which have increased since mid-2017.
The National Economic and Social Development Council is concerned over housing debts, which have increased since mid-2017.

The state planning unit is concerned over housing debts, which have increased since mid-2017.

The National Economic and Social Development Council (NESDC) reported on Monday household debt rose by 6.3% year-on-year in the first quarter to 13 trillion baht, making up 78.7% of total GDP, which was the highest in nine quarters since the first quarter of 2017.

"Household debt is likely to increase in the second quarter and it requires close monitoring because overall commercial bank loans for personal consumption increased at a high level of 9.2% in the second quarter," said Thosaporn Sirisamphand, NESDC secretary-general.

Figures for household debt in the second quarter are not yet available.

Non-performing loans (NPLs) increased with an outstanding balance in the second quarter of 127 billion baht, a rise of 10% from the same period last year.

They accounted for 2.74% of total loans and 2.75% of total NPLs, said Mr Thosaporn.

Outstanding NPLs for cars and credit cards increased at accelerated rates of 32.3 and 12.5%, respectively.

Personal loans under high supervision, which were still at a high level, and credit card loans with outstanding balances over three months continued to expand.

As for trends in household debt for the second half of 2019, housing loans are expected to slow from the first half because of softer demand for housing and restrictions on financial institutions' lending, he said.

However, credit quality is lower now that commercial banks competed to grant credits for relaxed approval criteria, as well as providing loans for housing in amounts higher than the real value before the central bank introduced loan-to-value measures in April, said Mr Thosaporn.

"The agency forecasts household debt as unlikely to increase over 80% of GDP this year based on economic growth projection of 3% this year," he said.

In a related development, the NESDC reported on Monday the unemployment rate was still low in the second quarter, despite rising from the first quarter.

The unemployment rate was 0.98% of the total workforce or 377,000 people. That was lower than the rate in the same period last year, which was 1.07% or 411,000 people.

On a quarterly basis, the rate edged up from 0.92% or 351,000 people in the first quarter of 2019.

In the second quarter, Thailand's workforce totalled 38.4 million, down 0.2% year-on-year.

Mr Thosaporn said issues that should be monitored in the future include the drought that is expected to further affect agricultural activities and farmers' income, and the economic slowdown following the contraction of export and tourism sectors that may affect employment in the next phase.

The government is also being urged to prepare to support new business models that are growing rapidly such as express delivery services.

Employment in this sector has increased significantly and is likely to grow continuously in line with gains in e-commerce business.

The government thus needs to review regulations to cover employment in these new kinds of jobs and new working patterns.

New rules should be linked with consumer protection for customers who use this online platform to receive standardised services and prevent deception, said Mr Thosaporn.

Do you like the content of this article?

Chinese cops intercept shipment of drug precursor

Chinese police have intercepted a shipment of hydrochloric acid bound for the Golden Triangle region, which will likely affect the production of 3.9 billion methamphetamine pills.

2 Apr 2020

US weekly jobless claims hit record once again

WASHINGTON: The number of Americans filing claims for unemployment benefits last week shot to a record high for a second week in a row — topping 6 million — as more jurisdictions enforced stay-at-home measures to curb the coronavirus pandemic, which economists say has pushed the economy into recession.

2 Apr 2020

Curfew imposed

All people in Thailand are banned from leaving home from 10pm to 4am starting Friday in the government’s latest move to contain the spread of coronavirus.

2 Apr 2020