High household debts have no impacts on economy

BANGKOK, March 1 (TNA) -- Although household debts amount to 81.1% of the gross domestic product (GDP), they have no impacts on the overall economy because non-performing loans (NPLs) remain low, the Finance Ministry has assured. Krisda Chinavicharana, director-general of the Fiscal Policy Office and spokesman of the Finance Ministry, said on Wednesday that the proportion of household debts to the GDP in the third quarter last year remained stable after its sharp increase in the past eight years. The increase in household debts resulted from government schemes to stimulate the purchases of cars and residences and the use of credit cards, he said. Of the debts, 27.1% were home loans and 3.4% of the loans were NPLs; and 15.1% were auto loans and 1.4% of the loans were NPLs. These would not affect financial institutions, Mr Krisda said. Meanwhile, 2.5% of the household debts came from credit card loans and 3.4% of the loans were NPLs; and 3% of the overall household debts were consumer loans and 5.2% of the loans became NPLs. Debts of credit card users and consumer loans were high risks for financial institutions, Mr Krisda said. He also said that public debts rose from 1.73 trillion baht to 1.74 trillion baht as the government allocated more budgets to implement urgent water management projects; increase the liquidity of Bangkok Dock Co and the Government Pharmaceutical Organization; adjust the debt structures of the National Housing Authority, the Bangkok Mass Transit Authority and the Bank for Agriculture and Agricultural Cooperatives; and raise the risk management funds of Aeronautical Radio of Thailand and Thai Airways International. The public debts should help stimulate the economy and their proportion to the GDP would not exceed 45% this year, Mr Krisda said. (TNA)