The economic ministers meeting cabinet this Monday (July 15) will seek solution for household debts.
The economic minister meeting chairs by Prime Minister Srettha Thavsin this Monday (July, 15) is a schedule to seek solution for household debt.
Household debt caused a significant reason to affect household consumption. Therefore, It was still doubt that the Thai economic growth can reach 3% as the target of the government.
As of the first quarter of 2024, total outstanding loans held by National Credit Bureau (NCB) members headed to 13,643 billion baht, increasing by 2.9% YoY.Comparing to the previous year, NPLs have grown 14.9% considerably driven by auto loan (+32%), housing loan (+18.2%), and credit card loan (+14.6%).
This increase was accompanied by a significant rise in Stage 2 loans in credit card and housing loan, by 32.4% and 15.0% respectively, in 1Q24 from the same period last year.
This reflects a heightened risk of these loans turning into NPLs in the future, which will worsen the household debt problem in Thailand, making it more difficult to address.
Thus, if Thai GDP cannot return to its potential level of above 3%, household debt level relative to GDP may continue to rise above 90% this year. It would take an extended period to bring the debt level back to the BOT target of 80% of GDP.
NPLs in five months of this year stood at 1.14 trillion baht
Meanwhile, the NCB reported the amount of NPLs in five months of this year stood at 1.14 trillion baht, higher than the 1.1 trillion baht during the Covid-19 pandemic.
New NPLs in May increased 3.2% from the previous month and jumped 11.3% year on year, the NCB said.
Most of these NPLs came from auto, housing, credit card and cooperative loans.
The credit bureau said the NPLs from auto loans saw the most significant increase, at 30.1% year on year, to over 250 billion baht across over 800,000 accounts.
Informal debt also still was a big problem
In a related issue, informal debt also hindered to the economic growth
However, the PM affirms Govt’s prioritization on addressing informal debt
Prime Minister Srettha responded on the issue of informal debt that it is another economic challenge that is prioritized by the government.
He said at the Parliament, Bangkok, during the 4th Session of the 26thHouse of Representatives, the 2nd Year (First Annual Ordinary Session)on July 11.
He told the parliament members that Deputy Prime Minister and Minister of Interior Anutin Charnvirakul and chief adviser to the Prime Minister Kittiratt Na-Ranong have been working relentlessly to tackle the problem.
According to the PM, informal debt is not only an economic but also a social issue of concern. With the ridiculously high interests, no matter how much people work, it is not enough to pay off their debts. These people may end up losing will to work and turn to illicit drugs or crimes.
Related News : PM confirmed the Thai economy in Q4 has definitely improved.
