Macroeconomics/social report in Q4

Chatrudee Theparat

Household debt increased by 3.9% in the third quarter of 2022

Household debt increased in the third quarter of 2022 while car loans should be monitored because the ratio of special mention loans to total loans is gradually increasing.

The National Economic and Social Development Council (NESDC) announced that household debt increased in the third quarter of 2022, while credit quality remained stable. Car loans should be monitored because the ratio of special mention loans to total loans is gradually increasing. The number of debtors who were in good standing but became bad debts as a result of COVID-19's impact is increasing.

NESDC’s secretary general Danucha Pichayanan said household debt was worth 14.90 trillion baht in the third quarter of 2022, a 3.9 % increase compared to 3.5 % in the previous quarter.

This was due to the economic recovery and improving labor market conditions. Meanwhile, the household debt-to-GDP ratio was 86.8 %, down from 88.1 % in the previous quarter. The credit quality of commercial banks remained stable.

NESDC’s secretary general Danucha Pichayanan

Non-performing consumer debt (NPL) accounted for 2.62 % of total loans in the fourth quarter of 2022. One of the special mentioned loans (SML), Loan overdue less than 3 months, car loans, accounted for 13.7 % of total loans.

According to credit bureau data, even after the COVID-19 issue had subsided, the number of NPL borrowers affected by
the COVID-19 remained high.

He said issues must be monitored and prioritized in the next phase including an accelerating debt restructuring of debtors who have begun to show signs of default and implementing special measures to assist NPL borrowers affected by COVID-19 in order to keep the number of them from rising.

The labor situation improved in the fourth quarter of 2022 from non-agricultural employment growth, while agricultural employment has been declining since the second quarter. In terms of overview of 2022, employment and working hours increased to levels comparable to the pre-COVID-19 period.

In the fourth quarter of 2022, 39.6 million people were employed, a 1.5 % increase from the same period last year, attributable to 3.9 % growth in the non-agricultural sector.

The rise of the tourism industry boosted employment in hotels and restaurants, wholesale and retail sectors.

Employment in the agricultural industry fell by 3.4 % due to the flooding in the southern areas and labor relocation.

The unemployed were 4.6 hundred thousand, representing a 1.15 %, which dropped both the unemployed who had previously worked and those who had never worked before.

In terms of labor situation in 2022, 39.2 million people were employed, a 1.0 % increase. Employment in the non-agricultural sector expanded by 2 % as the economy improved following the previous year's surge in tourism and exports.

On the other hand, employment in the agriculture sector has decreased by 1.2 % since July 2022 as a result of the floods and the movement to industries that have recovered well.

Issues to be monitored in the next phase are employment in the export sector and job opportunities in for the recent graduates. While the economy continues to recover at a slow and unpredictable pace, employment in related industries may suffer. It also makes it difficult for recent graduates to find work, cost of living burden due to high inflation rate; and labor shortage in tourism sector. In 60 provinces, hotels, accommodation, restaurants, and shops still need approximately 10,000 workers.