NESDC releases Q3 2024 Thai Social Conditions Report
Household-debt growth slowed, amounting to 16.32 trillion baht, with a growth rate of 1.3%,
Danucha Pichayanan, secretary general of the National Economic and Social Development Council (NESDC), on Monday revealed the Q3 2024 Thai Social Conditions Report. He said household-debt growth in the quarter had slowed, amounting to 16.32 trillion baht, with a growth rate of 1.3%, down from 2.3% in the previous quarter.
This reduced the household debt-to-GDP ratio from 90.7% to 89.6%. This marks the first time in 15 quarters, or about three and a half years since Q3 2020, that the ratio has fallen below 90%, which at the time stood at 91.2%.
Despite this being the lowest level of household debt since the Covid-19 pandemic, the ratio remains high compared with other Asian countries. Contributing factors include the high debt burden and declining credit quality, prompting stricter loan-approval processes by financial institutions. This is reflected in a 1.2% contraction in household loans issued by commercial banks, the first such decline.
“When comparing quarter-on-quarter figures, we need to observe whether household debt is actually decreasing. Household debt showed a significant reduction in Q2 2024, while Thailand's economy in Q3 showed good growth. If this trend of moderated growth continues, the household-debt situation is likely to improve as well,” Danucha said.
The ability of households to repay debt, however, continues to decline. According to data from the National Credit Bureau for Q2 2024, the number of personal-loan accounts overdue by more than 90 days (NPLs) stood at 9.6 million, with a total value of more than 1.16 trillion baht, accounting for 8.48% of total loans. This represents an increase from 8.01% in the previous quarter, with rising NPL proportions across all loan purposes.
Most household NPLs, around 71%, are linked to commercial banks and state-owned specialised financial institutions (SFIs). When examining the 12.2% overall growth in NPLs, the main contributors are vehicle hire-purchase loans and housing loans.
For loans overdue between 30 and 90 days (SMLs), the total stood at about 500 billion baht, representing 3.66% of total loans, down from 4.72% in the previous quarter. However, vehicle hire-purchase loans remain the only category where the proportion of SMLs to total loans has increased.
