BANGKOK: Thai workers are saddled with the highest debts in eight years amid the poor economy and inadequate income to cover their daily expenses, forcing many to rely on loan sharks, according to a recent survey.
The University of the Thai Chamber of Commerce (UTCC) survey involving 1,212 respondents from April 18-23 found 95.9 percent were in debt incurred mainly by daily expenses, vehicles and residential purchases.
The survey focused mainly on workers who earn less than 15,000 baht [$429.46] a month.
The average debt per household is estimated at 119,062 baht, the highest level in eight years and up from 117,840 baht last year and 87,399 baht in 2009. Unorganized loans represent 60.6 percent of debts, rising from 59.6 percent last year and 48.5 percent in 2009.
Thanavath Phonvichai, vice-president for research at the UTCC, said workers were facing mounting pressure from higher debts, with some starting to default on debt repayments.
Some workers have secured new debts to repay existing ones.
“What’s worrisome is the surge in the proportion of unorganized debts,” Thanavath said. “The government needs to speed up introducing measures to curb unorganized debts and raise workers’ incomes.”
He also called on the government to raise the daily minimum wage to ease the hardship of farmers and working people whose income cannot meet their expenses.
The appropriate daily wage to enable working people to stay afloat is 356 baht, he said.
The survey also found that working people want the government to ease the cost of living, raise the minimum wage, cut contributions to the social security fund and stimulate economic growth, as they are concerned about possible unemployment.
Thanavath said there were no signs of mass layoffs but companies had started cutting employees’ overtime payments and freezing recruitment.
“The survey found the business sector mostly sees the economy and operations as yet to recover in the second quarter. The situation may be even worse than in the first quarter,” he said. “They expect the recovery to pick up late this year, but this will also hinge on the government’s investment, export recovery and the end of drought conditions.”
The UTCC expects the drought to last until June, costing estimated losses of about 120 billion baht to the economy, both directly and indirectly, or about 0.85 percent of GDP, aggravating the plight of low-income farmers and workers.
Thailand has suffered a relatively long economic slowdown with growth of less than 3 percent a year since 2011, while most laborers’ incomes have not increased over the last three years. TNS