May 24, 2023
BANGKOK – Household debt increased by 3.5% to 15.09 trillion baht in the fourth quarter of 2022, rising from 14.91 billion baht recorded in the previous quarter, a 4% expansion, the agency said on Monday.
The ratio of household debt to gross domestic product (GDP) stood at 86.9%, marginally lower than in Q3 2022, which was recorded at 88.1%. The agency attributed this drop to the expansion of GDP.
NESDC secretary-general Danucha Pichayanan said the household debt is growing, albeit at a slower rate than the previous quarter, due to the continued rise in bad debts, which has left several good debtors unable to repay their loans.
“Household debt is still a ‘ticking time bomb’, an issue of concern that the new government must keep an eye on,” he said. “Past governments have deployed several measures to tackle the issue but the debt is still growing.”
Danucha added that the new government must continue to implement such measures as debt restructuring and promoting responsible spending among the public.
“Financial institutes must also reduce campaigns that stimulate spending via credit cards or similar services, which can affect people’s financial discipline and consequentially cause them to incur more debts,” he added.
The NESDC also reported an improving employment situation in the first quarter of 2023 with 39.6 million people employed, a 2.4% increase year on year. The centre attributed the increase to rising employment opportunities in both the agricultural and non-agricultural sectors.
Average working hours in the government sector stand at 41.4 hours per week and 44.3 hours per week in the private sector.
6.3 million people worked overtime in the first quarter of this year, an increase of 9% year on year.
The unemployment rate was recorded at 1.05%, with around 460,000 people out of work.
The digital and IT sectors reported the biggest shortage of skilled workers with around 30,000 positions vacant due to the low number of graduates in specific fields.
Danucha added that Move Forward Party’s policy of increasing minimum wages to 450 baht per day could have both positive and negative effects on the economy. He said the increased wages could help reduce household debt, but may incur additional costs for product manufacturers, who would in turn have to increase their prices.
Furthermore, a more expensive minimum wage could affect foreign investors’ decision to start or expand businesses in Thailand, he added.