The average household debt in Thailand has increased 5.09% year on year, to 217,952.59 baht, the highest in 14 years, and this year the debt may reach 95% of the gross domestic product (GDP), according to the forecast of the Centre for Economic and Business Forecasting of the University of the Thai Chamber of Commerce (UTCC).

The centre recently conducted a survey of 1,260 union workers, who each earns less than 15,000 baht a month, between April 18th and 24th, and found out that 99% of them are indebted.

According to the survey, most are bogged down with credit card and rental debts, because their incomes are insufficient and about 31.5% have defaulted on repayments.

Assoc. Prof. Dr. Thanawat Pholvichai, rector of the university and advisory chairman of the forecasting centre, warned that it is likely that household debt this year will climb to 95% of GDP, due to the rising prices of oil and consumer products.

According to the National Economic and Social Development Council, household debt for the third quarter of last year increased to an 89.3% of GDP.

Regarding the current minimum wage, averaging 336 baht, Thanawat said that it does not reflect the real economic situation and should be increased in line with inflation, currently from 4-5%.

He also noted that the 492-baht minimum wage, proposed by the Thai Labour Solidarity Committee, is too high, which he said would deal a big blow to many businesses and would drive up costs of production steeply.

He also suggested that the government extend the co-payment scheme, which is due to expire tomorrow (Saturday), for another phase which, he said, would help improve the purchasing power of consumers and help inject about 45 billion baht of much-needed money into the economic system.

Over 26 million Thais joined the 4th phase of the co-payment scheme, which commenced on February 1st. Each was given 1,200 baht, wired into their “Pao Tang” accounts for three months.