Has hope for Thailand’s economy come too late for the kingdom’s crippling debt crisis?

An improvement in third-quarter data and tourism limping back have not offset a surge in household debt, which hit 84 per cent of GDP in the second quarter

Experts fear worse is to come for Southeast Asia’s second largest economy after the government ended a debt holiday for struggling individuals and small businesses

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An auctioneer fields bids at the Siam Inter Auto warehouse in Bangkok, where US$1 million worth of second-hand cars were sold in a single day when This Week in Asia visited. Photo: Vijitra Duangdee

Published: 5:04pm, 16 Nov 2020Updated: 9:55pm, 16 Nov 2020

The bell at Siam Inter Auto (SIA) rings frantically, marking more than US$1 million in sales of second-hand cars – most sent to auction by banks clawing back what they can from Thais unable to make their repayments in an economy floored by Covid-19.

From condominiums and cars, credit cards to mobile phones, bad debt is rushing through Thailand, and experts fear worse is to come for Southeast Asia’s second largest economy after the government ended a repayment holiday for struggling individuals and small businesses.

Some of the consequences of this unprecedented economic collapse are parked in rows in the vast lot of SIA’s suburban Bangkok warehouse, where potential buyers do a high-speed triage of repossessed cars as fast-talking auctioneers whip up bidding wars from two podiums.

SIA has its finger on the pulse of the Thai economy, according to Gai Nanthana, its genial executive vice-president, and the prognosis isn’t good.

Potential buyers assess lists of second-hand cars at the SIA warehouse. Photo: Vijitra Duangdee

“We feel the economy. When things are good, our business is good as people sell their old cars and upgrade,” said the 57-year-old. “When the economy is bad – we do better. It’s very sad but bad debt forces people to sell … or downgrade, especially the middle class. Right now they are facing punishment. They can’t make their payments.”