Thai household debt expected to keep rising-Kasikorn Research

17-Apr-2021 Intellasia | TheThaiger | 5:02 AM Print This Post

Despite rolling out Covid-19 vaccines, in which could see a faster return to pre-Covid times, Thailand’s household debt is expected to keep rising. Kasikorn Research analysts say it could, in fact, reach 89-91 percent by the end of the year.

In a recent survey, KResearch says 10.8 percent of respondents could be stuck in a financial crisis. Of those who may be stuck, they indicated a drop in income, an inability to reduce expenses, and a high debt service burden per month that is exceeding 50 percent of their monthly incomes. This group of survey respondents is also concerned that it may not be able to provide for its basic needs in the near future.

In the 3rd quarter of 2020 and the year end, the figures were lower, at 86.6%, and 89.2 percent respectively. The upward trend isn’t unique as loans have increased while the economy has slowed. Almost 20 percent of household debts now are receiving financial-aid measures from financial institutions. The Bank of Thailand says the end of 2020 say 2.79 trillion baht tied up in financial relief programmes, which is equivalent to the 20%.

Despite government handouts and stimulus measures, the third wave of the pandemic is expected to increase outstanding debt under financial-aid programmes through the end of this month, but analysts say they are likely to not be any higher than the 3rd quarter of 2020. The amount of borrowers who may need further assistance after the relief programmes end in June 2021, is expected to be high.

The Covid vaccination rollout may give more flexibility in ending lockdowns in Thailand, funneling future financial assistance to those who are in serious need. The rollout may signal a switch from the standardised measures that were previously in place for determining who qualifies for financial aid, to a more individualised debt handling policy by financial institutions.

When asked what types of assistance are needed, survey participants ranked liquidity support at the top, followed by job creation that could help them maintain a stable revenue stream. Extension of financial-aid measures ranked 3rd. The rankings, indeed, point towards respondents needing to stabilise their platform of revenue first, before needing financial help.


Category: Thailand

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