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NESDB Report: Thailand’s Household Debt Remains Elevated in Q1/2023 as Car Loan Concerns Rise

The National Economic and Social Development Council (NESDB) has unveiled its report on Thailand’s socio-economic conditions for the second quarter of 2023. The findings reveal a mixed landscape characterized by improving employment metrics and an increase in household debt. While the labor situation has shown positive trends, concerns linger over rising car loans and a surge in bad debts.

Despite efforts to manage economic challenges, household debt in the first quarter of 2023 expanded by 3.6%, resulting in a total debt of 16 trillion baht. Notably, credit quality witnessed a marginal decline during this period. A notable area of concern has emerged in the form of car loans, where bad debts surged by 30%, indicative of an alarming upward trend.

The Secretary-General of NESDB reported that the labor landscape in Thailand displayed encouraging trends during the second quarter. The non-agricultural sectors experienced growth, with employment rising by 1.7% compared to the same period last year. This expansion was particularly notable in sectors such as hotels and restaurants, which registered a robust growth rate of 11.7%. The resurgence of the domestic economy and the steady influx of foreign tourists contributed to this positive trajectory.

The construction and manufacturing sectors also saw improvements in employment, with growth rates of 6.0% and 0.3% respectively. Similarly, the wholesale, retail, transportation, and storage industries exhibited modest gains, contributing to the overall employment landscape.

However, the agricultural sector faced challenges due to drought conditions, leading to a slight contraction in employment by 0.2% compared to 2022. Despite this setback, the labor situation remained optimistic as non-agricultural sectors propelled overall employment growth.

Working hours experienced notable enhancements, with average working hours in the private sector increasing to 46.7, indicating an upward trend for three consecutive quarters since the fourth quarter of 2022. Correspondingly, average wages exhibited positive growth, with the overall average wage reaching 15,412 baht per person per month, while the private sector recorded an average wage of 14,032 baht per person per month.

Furthermore, the unemployment rate in Thailand showed improvement, decreasing from the previous year to 1.06%, equivalent to 4.3 hundred thousand individuals who were unemployed.

As Thailand navigates these multifaceted economic dynamics, the NESDB report serves as a comprehensive overview of the nation’s socio-economic progress and challenges. The juxtaposition of improving employment conditions and concerns over household debt underscores the nuanced nature of the recovery process, emphasizing the need for balanced strategies to ensure sustainable economic growth.

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