Covid-19 spurs income, drives household debt to rise
Covid-19 spurs income, drives household debt to rise
Guru harmonizes 3 factors: “Reduced income, new loan growth old debts settled Continued pressure on household debt KBank stated that in the second quarter, debt volume accelerated by 4.8%, lower than the first quarter’s acceleration. TTB supported debt consolidation measures. reduce the burden of interest EIC is concerned about both internal and external debt. The impact of the COVID-19 epidemic aggravate the continued stagnation of the Thai economy In addition to reflecting the sales of goods, services and unemployed people Many economic research bureaus have reflected their views on the prospect of a recovery in the Thai economy that will be postponed for the next two years amid the challenge of income in the labor market that tends to drop 20-30%. longer unemployed Leaving the labor system to work more independently As for household debt, it tends to continue to rise. Ms. Kanchana Chokpaisarnsilp Research executive, Kasikorn Research Center Company Limited revealed to “Economic base” that the tendency for Thai household debt in the second quarter will be outstanding at 14.250 trillion baht, an accelerated growth of 4.8% compared to the same period last year. increased from the first quarter of 2021, an increase of only 4.6% from the same period last year with an outstanding balance of 14.128 trillion baht. This was a result of the debt of the retailers entering the aid or restructuring measures. and there has been an increase in lending in both housing loans and consumer loans. causing new outstanding debt to grow while the old debt is repaid less from financial institutions’ assistance measures
For the ratio of household debt to GDP The trend is likely to shrink to no more than 90%/GDP from 90.5% in the first quarter as the second quarter’s nominal GDP grew 10.7%, higher than the market expected. “Despite the accelerating growth in household debt outstanding, but nominal GDP is growing at a higher rate, the household debt-to-GDP ratio is expected to fall below 90% of GDP. will come back again from the economic momentum especially the impact of COVID on economic activities in the 3rd quarter continuously. As a result, the overall household debt to GDP continues to increase,” Ms Kanchana said. Mr. Narit Sathaphondecha Chief Executive Officer TTB Economic Analysis Center or ttb analytics said that TTB is expected to Thailand’s household debt level may rise to 93.0%/GDP by the end of 2021, with the second and third quarters still increasing, as personal loans continue to grow. The household debt was a problem of shrinking income and had not returned. The original debt was not paid. because there was a moratorium on debt restructuring and debt restructuring But households still need liquidity. Therefore, debt continues to increase. While it is difficult to grow GDP numbers above household debt, it is difficult. Therefore, the debt restructuring or debt consolidation approach should will prevent the debt from expanding. But in practice, debt growth in the system is better than letting people go out to grow debt outside the system. which in terms of increasing revenue have to wait for the situation after the lockdown is released which takes time If we can start to control covid Not coming back to lockdown again will see a return of income Which must support not to come back to lockdown again
Household debt is still an issue that needs to be accelerated in debt restructuring. or consolidate debt faster By restructuring debt, not every time will always reduce the debt balance. but to reduce the burden of installments, that is, to extend the term, reduce the burden of installments for the debtor to be able to wait for income to come back which restructures its debt so that it needs to stimulate the economy when opening the country,” Naris said. The debt consolidation People worried about losing their collateral If the government has a mechanism to reduce anxiety, such as a 40% margin guarantee to make people and banks feel comfortable doing so because debt consolidation will help more than reducing interest. because the interest on the total debt will be reduced by half, for example, the original interest at 18% per year, may be left only 6-7% per year, and during the debt restructuring, customers also have a pause in repayment Dr. Yanyong Thaicharoen, Senior Executive Vice President Group Chief Executive Officer, Economic Intelligence Center, Siam Commercial Bank Public Company Limited, said that the signs of an increase in household credit especially personal loans reflecting the problem of liquidity While Google Trends also found that Searches for the words “quick money” and “hot money” were at a relatively high level. compared to the pre-Covid period. Issues of concern Household debt compared to income is likely to be high. due to reduced income The increase in debt both in the system and in the informal debt. “Worried that after the debt moratorium is over, Household balance sheet part may be worse because it is still necessary to borrow both formal and informal debts,” said Dr. Yanyong. EIC assesses that Household debt, which is one of the three economic scars, is the business sector shutting down. The labor market is fragile and household debt is high. It is likely to continue rising from the second quarter of 2021 at 90.5% because the GDP of the second half of this year will be negative. 92% which is a serious problem
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