Pavida agrees that credit cards in particular have become an “easy trap” for younger individuals exposed to intense marketing campaigns from lenders.
Non-productive loans- those considered to enhance spending power but no output- exceed effective loans now in Thailand. They include bills for automobiles, personal funding and credit cards.
COVID-19 contributed to another rise in these types of debt amounts as home incomes ran clean over the extended pandemic time.
Mali, a then 42-year-old Bangkok-based entrepreneur who likewise declined to give her complete name, started a car loan during the time the authorities was offering its car buying system. She then has two of them, on top of a loan for an apartment, a circumstance she considers “normal” now in Thai culture.
“A bunch of Thais are in debt because their income is low when compared with the cost of living, ” she said.
Average income in Thailand were about 15,700 baht in the second quarter of 2024, according to the National Statistical Office of Thailand.
Mali admitted that bill had become a “big burden”, although she felt comfortable to handle it going ahead. For this century while, the debt narrative has evolved to be tougher to argue with compared to the past, she thinks.
Part of that can be explained by life- the purchase demands of modern life with the influence of social media- and the changing attitudes of younger years who never more live at home until they are married like in the past.
“It seems like the older technology were paying off their debts easier than us. It feels like a really long quest for us, ” Mali said.
Jack the instructor even flagged the challenges of living in rural areas, with fewer people resources.
“Living in the landscape, there is no public transportation that enters straight to your doorstep. That is why a bicycle is important. And the older generation can even survive without a phone or computer but our generation could, ” she said.
Jack’s position is what is playing out all over the country, Pavida said, and proof of the fundamental problems that exist beyond the visible signs of overspending.
Do not just responsible those in debt, she said, but instead research the “fundamental concerns with the Thai economy ” for both individuals and small business owners.
“It is a monetary condition. But if you ask yourself why people want to buy a car, one of the dilemmas is that they don’t have an option, ” she said.
“And I think the kind of dominant dominance of big company is one factor that has taken the air out for smaller businesses. ”
There could be pain away for the Thai market depending on the next moves by both the state and the Bank of Thailand.
Nonarit expects both to move slowly, forecasting the authorities to try and boost public debt to GDP towards the sky restrict of 70 per cent- above where it now sits at about 64 per cent- to keep the money flowing through the economy over the next five years.
“ But then we will have higher and higher debt. And this is the way they try to push the problem into the future, ” he said.
The alternative would be to let people “feel the crisis and learn the pain” of bad borrowing.
“That’s the hard way. But I don’t think the Bank of Thailand will choose to let this happen”.
Additional reporting by Grissarin Chungsiriwat.