Re: “Household debts cast long shadow”, Business, July 10.
It looks like the Thai economy is in the process of debt deleveraging. The continued recovery of the economy helped to lower the household debt/GDP ratio from 80.8 per cent to 78 per cent between 2015 and 2017. And it is expected to drop further to 77.6 per cent this year.
But figures for household debt versus annual income tell a different story. These have taken a sharp hike, from 82.7 per cent in 2015 to 94.7 per cent last year.
This shows that income of households grew less than their expenses, which pushed them to borrow more money to meet their costs of living, whether for consumption, housing or investment.
Households with debts are not feeling the benefit of the continued economic growth and thus not able to significantly reduce their debts.
Instead, to reduce the debt burden, ordinary households need direct measures such as development of their labour productivity and easier access to credit that they can then invest.