The National Economic and Social Development Council (NESDC) warns that Thailand's household debt is continuing to increase, with close monitoring required for auto loans and debt from savings cooperatives, says secretary-general Danucha Pichayanan.
He said during a press conference on the country's social outlook for the second quarter of 2023 that household debt amounted to 15.9 trillion baht in the first quarter of the year, an increase of 3.6%, accelerating slightly from 3.5% in the previous quarter, while the ratio of household debt to GDP stood at 90.6%, decreasing slightly from the previous quarter.
Mr Danucha said most of the growth in household debt in the first quarter came from the purchase of real estate and personal loans, up by 5% and 5.3%, respectively, when compared to the previous quarter.
As for the overall debt serviceability of households, non-performing loans (NPLs) were worth 144 billion baht at the end of March this year, equivalent to an NPL ratio of 2.68%, accelerating from 2.62% in the fourth quarter of 2022.
However, there are alarming household debt issues which should be addressed.
Firstly, bad debt and the risk of bad debt in auto loans are likely to continue to increase. In the first quarter of 2023, NPLs from auto loans increased by 30.3% from the same period last year while the proportion of special mention loans to total loans also continued to increase.
Secondly, the demand for loans from savings cooperatives for personal use and repayment of existing debts continued to grow with loans to cooperatives totalling 940 billion baht, of which 50% are non-productive loans.
Apart from the provision of financial literacy on borrowing, finance and debt management by the Finance Ministry, the survey found financial literacy and access to financial services for Thai people in 2022 had decreased compared to 2020.
In the second quarter of this year, employment tallied 39.7 million, an increase of 1.7% from the same period last year due to a 2.5% expansion of employment in non-agricultural sectors. Hotels and restaurants saw an increase of 11.7% in employment due to the recovery of the domestic economy and the increase in the number of international tourist arrivals. Likewise, the construction sector saw an increase of 6.0% while the manufacturing, wholesale and retail, transportation and storage sectors increased by 0.3%, 0.5% and 1.1%, respectively.
On the other hand, employment in the agricultural sector contracted from 2022 by 0.2%, partly due to drought.
The unemployment rate stood at 1.06%, equivalent to 430,000 people, compared with 1.05% in the preceding quarter, and was lower than the 1.37% rate in the same quarter of 2022.