Personal and credit card loans contribute to rise in Thailand’s household debt

Household debt for the third quarter of 2022 increased by 3.9%, to over 14.9 trillion baht for the first time in five quarters, largely due to the rise in personal loans and credit card borrowing, according to the National Economic and Social Development Council.

Personal and credit card borrowing for the third quarter of 2022 increased 20% and 10% respectively. The main issue of concern, according to the Credit Bureau, is the increase of NPLs on credit cards among the 30-49 age group of working people, while pensioners are bearing an average of 77,000 baht in car loan debt.

NPLs have increased from 4.3 million for the first quarter of 2022 to 4.7 million, 60% of which are personal loans. Total NPLs in the system amount to 400 billion baht, double that of the first quarter.

Although household debt for the third quarter increased by 3.9% compared to the second quarter, they account for 86.6%of the GDP, down from 88.1% for the second quarter.

The employment situation in the fourth quarter improved, expanding by 1.5% compared to the same quarter a year before, thanks to economic recovery and the reopening of the country to foreign arrivals. The number of people employedduring last year was 39.2 million, including 11.9 million in the farm sector and the rest mostly in hotel and tourism businesses.

The NESDC warns, however, that exports are predicted to slow this year which may impact export-oriented industries. The cost of living remains high, despite wage adjustments and revenue increases.

The NESDC points out that only 4.2 million people paid personal income tax, out of 10.8 million who submitted tax returns.

Many people who have incomes are non-formal workers and, therefore, are outside tax system, while many high earners resort to deductibles and donations to pay less tax, according to the NESDC.


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