Household debt remained on the rise in the second quarter, but slowed from the previous quarter, thanks largely to the weaker economy, says the state planning unit, the National Economic and Social Development Council (NESDC).
On Monday, the NESDC reported the country's household debt in the second quarter amounted to 13.1 trillion baht, up by 5.8%, a deceleration from 6.3% in the previous quarter. The debt accounted for 78.7% of GDP.
By category, housing loans grew by 7.8%, down from 9.1% in the previous quarter.
Likewise, loans for automobiles rose by 10.2%, down from 11.4% in the second quarter, whereas loans for other personal consumption increased continually, growing by 11.8%, up from 11.3% as a result of the expansion of both credit card loans and other personal loans.
"Overall credit quality is under surveillance as many credit types have higher risks," said Thosaporn Sirisamphand, secretary-general of the NESDC.
"Non-performing loans [NPLs] outstanding for commercial banks amounted to 133 billion baht, an increase of 12.2% from the same period last year, with the NPL ratio of housing loans standing at 3.49%, up from 3.34% in the previous quarter."
For car loans, the NPL ratio increased to 1.86% of the total from 1.82% in the previous quarter, while the NPL ratio of credit card loans was 2.65%, compared with 2.48% in the previous quarter. The NPL ratio of other personal loans was at 2.36%, down from 2.42%.
Mr Thosaporn said household debt in the second half of 2019 is expected to slow from the first half because of weak housing demand, an excess supply in the property market and tighter lending from the financial institutions.
Car loans slowed down because of decreased car and motorcycle sales, and most financial institutions retained strict scrutiny for credit lending.
Loans for other personal consumption tend to increase according to the increasing credit card loans.
Mr Thosaporn said the economic cabinet realises these threats and authorised the NESDC, the Bank of Thailand and the Finance Ministry to study household debt in detail to help the government find solutions on the spot.