The value of self-denial
Re: "What have we learned from Tom Yam Kung crisis?", Streetwise, June 24.
The doubling of household debt in 15 years might sound sensational, but it is in fact not as serious as it seems. Normally inflation effectively doubles the prices of goods and services every eight to 15 years. In other words, Thai household debt in real terms (corrected for inflation) is probably less of a burden than it was 15 years ago. Moreover the significance of the debt problem also depends on how the money is spent - debt can also bring gains in terms of capital goods like cars, houses and land. Nevertheless, showing a little more self-denial might benefit many Thais' financial situation. The desire nowadays to possess luxury goods immediately, instead of saving the money to be able to buy them without borrowing, is detrimental to the financial health of many households.