ADB warns Thailand to change politics, address debt

thai protetsThe Asian Development Bank (ADB) has suggested that once Thailand has a permanent government in place, it should drop its populist policies as a way to rein in rising household debt.

Luxmon Attapich, ADB senior country economist, said the high level of household debt in 2013 had lowered people’s purchasing ability, and this situation had continued into this year at the same time as reduced income as the slump in the economy had affected consumers’ ability to repay their debts.

She said a short-term solution to increase people’s ability to repay their loans was for the economy to pick up, but there were also long-term solutions such as the promotion of a money-saving culture and discouraging people from taking out superfluous loans.

She also suggested that the new government adopt fewer populist policies that have the effect of eventually raising personal debt and for financial institutions to moderate the use of campaigns that lure customers into borrowing for impractical reasons.

The Bank of Thailand reported that at the end of 2013, household debt stood at 9.79 trillion baht ($300 billion), or 82 per cent of gross domestic product. This compared with just 55.8 per cent of GDP at the end of 2008. And the debt-to-GDP ratio has continued growing according to Kasikorn Research Center, which estimates it will rise to 84 per cent by the end of 2014.

The World Bank’s “Thailand Economic Monitor” reported last month that the high level of household debt was one of the factors constraining Thai consumers’ purchasing power in 2013.



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The Asian Development Bank (ADB) has suggested that once Thailand has a permanent government in place, it should drop its populist policies as a way to rein in rising household debt. Luxmon Attapich, ADB senior country economist, said the high level of household debt in 2013 had lowered people’s purchasing ability, and this situation had continued into this year at the same time as reduced income as the slump in the economy had affected consumers’ ability to repay their debts. She said a short-term solution to increase people’s ability to repay their loans was for the economy to pick up,...

thai protetsThe Asian Development Bank (ADB) has suggested that once Thailand has a permanent government in place, it should drop its populist policies as a way to rein in rising household debt.

Luxmon Attapich, ADB senior country economist, said the high level of household debt in 2013 had lowered people’s purchasing ability, and this situation had continued into this year at the same time as reduced income as the slump in the economy had affected consumers’ ability to repay their debts.

She said a short-term solution to increase people’s ability to repay their loans was for the economy to pick up, but there were also long-term solutions such as the promotion of a money-saving culture and discouraging people from taking out superfluous loans.

She also suggested that the new government adopt fewer populist policies that have the effect of eventually raising personal debt and for financial institutions to moderate the use of campaigns that lure customers into borrowing for impractical reasons.

The Bank of Thailand reported that at the end of 2013, household debt stood at 9.79 trillion baht ($300 billion), or 82 per cent of gross domestic product. This compared with just 55.8 per cent of GDP at the end of 2008. And the debt-to-GDP ratio has continued growing according to Kasikorn Research Center, which estimates it will rise to 84 per cent by the end of 2014.

The World Bank’s “Thailand Economic Monitor” reported last month that the high level of household debt was one of the factors constraining Thai consumers’ purchasing power in 2013.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Donation Total: $10.00