THAI ECONOMY IMPERILED BY HOUSEHOLD DEBT

Thailand's rising household debt may slow the country's economic recovery, as people use their income to repay debt rather than spend on consumption, warns the government's planning unit, according to Bangkok Post.

Jinanggoon Rojananan, deputy secretary-general to the National Economic and Social Development Council (NESDC), said the latest wave of COVID-19 infections has triggered not only a surge in household debt but also a drop in income.

Ms. Jinanggoon said the surge of infections also affected people's ability to repay debts, leading to an increase in the amount they owe.

The Bank of Thailand reported last week Thailand's household debt ratio to GDP rose to 90.5% in the first quarter, the highest since 2003, as COVID-19 outbreaks continue to batter the economy.

At the end of March, household debt increased to 14.1 trillion baht from 14.0 trillion at the end of December, equal to 89.4% of GDP, already among Asia's highest.

The central bank began collecting household debt data in 2003. The NESDC predicted the household debt-to-GDP ratio would remain high this year because the economy has not recovered to the level it was at prior to the pandemic.

The labor market could face more hardships, pressuring household income, said the think tank.

Low-income households will be particularly cautious with their spending this year, especially for durable goods, said the NESDC. As a result, demand for homes and automobiles has slowed considerably.

Meanwhile, credit card and personal consumption loans may see an increase in demand due to liquidity issues, as could low-interest loans for residents through government-owned financial institutions such as the Government Savings Bank, said the think tank

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