Finding it harder to make ends meet
Up to 84 per cent of households say their income is no longer sufficient to cover expenditure mainly due to an increase in the price of certain goods, the hike in interest rates and the higher cost of energy, according to a survey by the University of the Thai Chamber of Commerce.
Those who earn between Bt20,000 and Bt40,000 per month are experiencing the most serious problems, according to Thanavath Phovichai, director of the Centre for Economic and Business Forecasting (CEBF) at the university. The country has 19.3 million households, with an average debt of Bt116,340. Household debt has been a point of concern to the authorities, amid sluggish economic conditions as layoffs or redundancies could leave people unable to pay their debts. Concurrently, the National Statistics Bureau's employment figures show that in July employment in the non-agricultural sectors, particularly in retail and property development, dropped by 170,000 year on year, as industries shed workers to make up for higher oil prices. In July, employment in these sectors touched 21.05 million, compared to 21.22 million in the same period last year. Meanwhile, employment in the agricultural sector rose to 15.69 million in the month, up 820,000 from 14.82 million a year earlier. Studying these trends, the University of the Thai Chamber of Commerce expects consumers to reduce spending and rein in their debts because of unclear economic conditions. Due to waning consumption, Thanavath estimates household debt this year will reach 29.10 per cent of Thailand's gross domestic product (GDP). The figure represents a decrease from 29.87 per cent and 27.08 per cent in 2004 and 2002, respectively. He said non-performing household loans are likely to be stable. Bad household debts are expected to reach Bt200 billion, accounting for around 10 per cent of the country's overall Bt2.25 trillion household debt. "As a result, household debt would not be a national problem in terms of the overall macro-economic scene, though it will be a concern to individuals," he said. The centre surveyed 1,187 people across the nation and found that 38 per cent, the biggest percentage, would not increase their debt burden next year. Most of those surveyed said they were concerned about several of the country's economic risk factors. These include household finances, economic trends, household debt and public debt. The survey found the increase in household debt was equal to the rise in household income, but in the future household debt could increase faster than rises in income. This was mainly because people, particularly low-income earners, had easy access to funds.
Somruedi Banchongduang The Nation
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