The National Credit Bureau has issued a warning about the potential risk of 610 billion baht in housing loans becoming non-performing debts, particularly impacting individuals with lower and middle incomes. Thailand’s household debt, amounting to 16.2 trillion baht, poses a substantial threat to the economy, with roughly one trillion baht categorized as non-performing loans.
The auto industry is witnessing a 12.46% decrease in car sales, linked to the growing household debt and stricter loan conditions set by banks, resulting in a 50% rejection rate for car loan requests.
Surapol Opasatien, the CEO of the National Credit Bureau, has expressed worries regarding mortgage borrowers, mostly low and middle-income earners, who have acquired homes valued at 3 million baht or less. These borrowers are now lagging by 1-2 repayments, raising concerns about potential mortgage defaults leading to non-performing loans.
In the absence of immediate government support such as debt restructuring, these loans could have severe repercussions on Thailand’s economy in the long term. The National Credit Bureau highlights that the country’s household debt, amounting to 16.2 trillion baht, makes up 91% of the GDP, posing significant risks.
Out of the total household debt, around one trillion baht is labelled as non-performing, including 180 billion baht in housing loans, 230 billion baht in vehicle loans, 260 billion baht in personal loans, and the remaining in credit card debts. The scenario is accentuated by challenges faced by various industries. For example, the automobile sector has experienced a decline in car sales in January due to mounting household debt and stricter loan criteria by commercial banks, resulting in a higher rejection rate for car loan applications.
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