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*It is true that the Thaksin government promoted purchasing schemes for first-time home and car buyers as part of their populist agenda, and as a result, the young and low income consumer (income less than 10,000 baht or $312 per month) is over extended.  But is household debt now at scary levels?
*In fact, only 12% of Thai households fall in the less than 10,000 baht/month category, and because of their low incomes, they represent much less than 12% of total spending.
*Further, 48% of Thai households have no debt at all.  While household debt to GDP is now at about 78%, two thirds of this is collateralized debt backed by mortgages or automobiles.




*The Thai government currently has outstanding debt of 44% of GDP, but only 7% of GDP is government external, non-baht debt.  Thai corporates (including the debt of the state oil enterprises, PTT and PTTEP, which should borrow in USD to match their USD income) is another 34% of GDP.
*Compare this with the US, where debt and unfunded mandates are $75 trillion, or 500% of its GDP of around $15 trillion.  Or Japan, with 214% of GDP, or Malaysia, with debt at 51% of GDP.
*Many examples of how Thai corporates have taken on more debt, but is this excessive debt or just an optimal amount of debt used to deliver higher equity returns?
*On a combined basis, EBITDA (cash flow) from listed Thai companies covers their combined interest obligations by more than 7.8x times, so it is very unlikely that there will be widespread defaults on bank loans. This compares with the 1997 EBITDA to interest coverage of only 1.8x.
*Further, net debt to equity for listed Thai companies is now only 0.6 vs 1.0 in 1997.

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