Thai workers hit by highest debt level in 14 years, survey finds
Thailand’s workers are experiencing the highest household debt levels in 14 years, adding to burdens from the high cost of living, according to the latest Thai Chamber of Commerce (UTCC) survey.
The survey of 13,000 respondents earning less than 15,000 baht per month found that their household debt has soared 25.05% this year to an average 272,528 baht. However, it also found that their proportion of informal debt owed to loan sharks has fallen to a 14-year low.
Conducted from April 18-24, the survey revealed that informal loans had dropped to 20.2% of total lending from 31.1% last year.
UTCC president Thanawat Phonwichai said some of the informal loans had likely been switched to formal loans. Although household debt remains high, it is not a cause for concern, he added.
Respondents had to make average monthly repayments of 8,577 baht. Interest on formal loans averaged 8.76% per year, while informal loans carried average interest of 15.5% per month.Of workers surveyed, 77.2% said they had insufficient income to cover expenses.
However, the survey found that workers are planning to spend more on leisure activities this Labour Day (May 1). It forecast average Labour Day spending of around 2,500 baht per person, resulting in total spending of 2.07 billion baht, up 29.8% from last year.
Asked what they wanted to see from the new government, most workers said reduction of the income gap, a rise in the minimum wage to reflect higher living costs, price caps on basic necessities, and policies to create jobs.