Former minister questions export growth data as Bank of Thailand plans to rein in consumer loans

[webfact]

(Left) On Monday, the Secretary-general of the National Economic and Social Development Council (NESDC) confirmed that the deteriorating world economic environment was being monitored by the Ministry of Finance, his agency and the Bank of Thailand. It comes after last week’s warning from the former Minister at the Prime Minister’s Office Dr Kobsak Pootrakool (right) 

 

by Joseph O' Connor

 

Plans announced by the Bank of Thailand to issue guidance to financial institutions in the opening quarter of 2023 on reining in excessive consumer lending for foreign holidays and expensive smartphones to tackle Thailand’s ฿15 trillion in household debt, 35% of which is credit card borrowing.

A former minister who last week warned Thai economic policy chiefs to prioritise the conservation of the kingdom’s foreign exchange reserves ahead of a deteriorating world economy in 2023 has questioned recent official Thai economic data in relation to export growth and domestic consumption. On Monday, the Secretary-general of the National Economic and Social Development Council (NESDC) Danucha Pichayanan described the prospects for next year as ‘quite worrisome’ but said that Thailand’s key economic agencies were monitoring the situation.

 

Meanwhile, the Bank of Thailand, while maintaining its more dovish monetary policy, thought to be driving funds out of Thailand, has announced plans to issue guidance to financial institutions and lenders in the first quarter of 2023 to rein in consumer borrowing for such things as expensive

smartphones and foreign holidays as it underlines the need for action in reducing the country’s level of household debt which was recorded at ฿15 trillion at the end of June this year.

 

Full story: https://www.thaiexaminer.com/thai-news-foreigners/2022/10/12/former-minister-queries-export-growth-data-kobsak-pootrakool/

 

-- © Copyright Thai Examiner 2022-10-12

 

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[ozz1]

Yes unfortunately Thai logic new phone new car live in a dump the banks will keep lending them money something has to give eventually

[Isaan sailor]

Go to any mall on a weekend.  Parking lots full with late model cars and trucks.  Where do they get the money?  More from credit than cash.

[Cake Monster]

5 hours ago, ozz1 said:

Yes unfortunately Thai logic new phone new car live in a dump the banks will keep lending them money something has to give eventually

About  5 or 6 Years ago now, " Bloomberg " described Thailand as a Nation full of people living in Tin Sheds but driving around in BMW Cars.

But all this irresponsible lending is now coming to a head, and not before time.

Capital outflows have been increasing over recent Months as the US fed raises its rates, and over the last couple of weeks or so we have all kinds of people from Prawit to the this Guy saying the Foreign Exchange Reserve Account has to be preserved.

One has to wonder just how depleted that Account is now, as there appears to be a lot of concern about it.

A massive amount ( 35 %) of the 15 Trillion Baht debt load is on Credit Cards alone, and there is no mention at all of the amount or percentage that is against poor asset Loans such as Motorcycles, Cars and White Goods

These Credit Cards are not used to support Foreign Holidays or Phones, but are used for living Day to Day in Lifestyles the Thai people think is theirs by right, but for many is way out of their league.

[RichardColeman]

My wife thinks I'm mad when I try to explain to her about the amount of 'poor' people in Thailand owning new cards and pick-ups far out weighs much richer 'poor' people in my own UK owning the same.

 

 

[Mavideol]

1 hour ago, Isaan sailor said:

Go to any mall on a weekend.  Parking lots full with late model cars and trucks.  Where do they get the money?  More from credit than cash.

I know this is about Thailand but they are copying their big brothers from China.... the Chinese also started with new cars, 2-3 per family (husband, wife, kid) no the cheap cars but well know foreign cars,  they saw the easy way to get money, bank people going around housing to offer them loans (I saw it with my own eyes and some relatives fall for it,  then they started with housing/apartments, refinancing with the down payment from the 1st one and they accumulated 3-4 and sometimes five real estate holdings without absolutely no cash but housing prices were going up on a weekly basis, all was good until the bubble burst.... now the majority of Chinese banks are struggling to get rid of their repossessed/over stocked housing and bad loans

Edited October 12, 2022 by Mavideol

[peter zwart]

(And don't forget the loans from the loan sharks.) Corona was already disastrous for many people, but the upcoming global economic downturn will cause much more damage as most people no longer have reserves and will soon no longer have access to the credit market. Not a pleasant prospect.
 

[hotchilli]

20 hours ago, webfact said:

Plans announced by the Bank of Thailand to issue guidance to financial institutions in the opening quarter of 2023 on reining in excessive consumer lending for foreign holidays and expensive smartphones to tackle Thailand’s ฿15 trillion in household debt, 35% of which is credit card borrowing

Most people I know are borrowing to pay back car loans, student loans and money to buy food.

[hotchilli]

14 hours ago, Isaan sailor said:

Go to any mall on a weekend.  Parking lots full with late model cars and trucks.  Where do they get the money?  More from credit than cash.

The elite don't use their own money... they use their savings as a credit and have a loan from the bank.

Only the lower end have to live out of their ar$e pockets.