Thailand's household debt in the second half this year has slowed from the first half thanks to weak housing demand, excess supply in the property market and tighter lending from financial institutions.
Car loans slowed down because of lower car and motorcycle sales, while most financial institutions retained strict scrutiny for credit lending, according to a report to the cabinet yesterday by state planning unit National Economic and Social Development Council (NESDC).
Yet loans for other personal consumption increased, mainly for credit cards.
Narumon Pinyosinwat, a government house spokeswoman, said based on the NESDC's report the cabinet was not concerned about the household debt rate, citing the weaker trends for debts incurred from house and car purchases, which accounted for 46.7% of the total.
The economic cabinet recently 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.
According to the NESDC's report, 33.8% of total household debt went to purchase houses, with 12.9% to buy cars, 24% owed as personal debts for doing businesses, 18.6% secured to develop their occupations, and 3.1% for education.
Only 3% was from credit cards and 4.6% for other purposes.
The agency reported in the past the government has implemented various measures to monitor the expansion of household debt, such as promoting financial literacy with a focus on target groups, such as vocational employees, first-time workers, youth and farmers.
The Bank of Thailand has taken various actions to oversee the issuance of loan types, such as regulation of car title loans, adjusting the loan-to-value criteria, and studying the creation of standards for calculating the debt service ratio.
Other measures have included assisting debtors burdened by natural disasters and using debt restructuring schemes.
The agency 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% growth 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 by 11.8%, up from 11.3% as a result of the expansion of both credit card and other personal loans.
According to the NESDC, overall credit quality is under surveillance as many credit types have higher risks.
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.
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 2.36%, down from 2.42%.