Given the thin financial cover of many Thai households, maintaining efforts to reduce the debt burden is absolutely necessary, the study found.
The report says global financial assets climbed by 4.9 per cent in 2015, just a whisker above the growth rate of economic activity. In the three previous years, financial assets grew at twice that pace, with an average rate of 9 per cent.
“The development of financial assets has reached a critical juncture,” said Michael Heise, chief economist of the Allianz Group, the major shareholder of Allianz Ayudhya Assurance. “Obviously, extreme monetary policy is losing its impact even on asset prices. As a consequence, an important driver for asset growth no longer exists. At the same time, interest rates continue their remorseless slide, even into negative territory. For savers, the outlook is not rosy.”
In Asia excluding Japan, debt growth picked up, and in some countries including South Korea and Malaysia, debt ratios came in at levels seen in the United States, Ireland or Spain at the height of the housing boom, he said.
In Thailand, growth of private households’ liabilities was higher than asset growth. Deposits as well as assets with life insurance and pension funds increased by less than 2 per cent and assets in securities decreased by 10 per cent because of the slump in the Thai stock market.
With loan growth regularly surpassing that of gross domestic product in the last 10 years, households’ debt-to-GDP ratio increased from 45.1 per cent to 81.6 per cent in the period.
The development of the assets-to-GDP ratio was less dynamic: It increased from 107.9 per cent in 2005 to 119.2 per cent at the end of 2015 – leaving Thai households with the worst assets-to-liabilities-ratio of all analysed Asian countries at a mere 1.5.
For comparison: In Taiwan the respective factor was 5.5, with the debt-to-GDP ratio standing at 90.4 per cent, while private households’ financial assets amounted to 498.3 per cent of GDP.
Thailand comes in 45th in the global ranking and eighth in the Asian ranking of net per capita financial assets. Per capita gross financial assets amounted to 6,070 euros; however, after subtracting liabilities, net financial assets of the average Thai shrank to a mere 1,920 euros (Bt74,500). The respective amount was only lower in India and Indonesia.
The gap between Thailand and the next wealthier country in the region, Malaysia, widened again, with the average Malaysian now owning four times the net per capita assets of the average Thai, at 7,670 euros.
The distance to the richest households was even higher: In Japan, net financial assets per capita amounted to 83,890 euros, more than 43 times the amount in Thailand.