Zombie Thai firms holding back economic growth as they struggle just to pay interest on bank debt

[webfact]

Atchana Lamsam, the Senior Director of Financial Institutions, Risk Model and Analysis Department at the Bank of Thailand, revealed this week that loans for the third quarter at Thai banks contracted by 0.9% as the Economic Intelligence Centre (EIC) of Siam Commercial Bank drew attention to the impact of zombie firms on Thailand’s inability to enjoy dynamic GDP growth.

Another negative impact of government intervention in the free market caused by the disastrous pandemic shutdown in 2020 was identified this week. Zombie firms with no growth potential clogging up the financial system and absorbing resources.

The Bank of Thailand has revealed a contraction of 0.9% in outstanding loans in Thai banks as the central bank moves to rein in private sector debt levels, something which will go into overdrive in 2024. At the same time, a report by the Economic Intelligence Centre (EIC) at Siam Commercial Bank warned that ‘zombie’ Thai firms, making up 18.5% of those operating, were holding back economic growth by using up resources and reducing competitiveness, another negative impact of the previous government’s generous supports during the pandemic shutdown.

 

This week, the Senior Director of the Financial Institutions, Risk Model and Analysis Department at the Bank of Thailand, Ms Atchana Lamsam, revealed that the banking sector in general was in a robustly healthy position with over ฿65 billion in profits in the third quarter of 2023.

 

by Joseph O' Connor

 

Full story: Thai Examiner.com 2023-11-25

 

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[hotchilli]

8 hours ago, webfact said:

The Bank of Thailand has revealed a contraction of 0.9% in outstanding loans in Thai banks as the central bank moves to rein in private sector debt levels, something which will go into overdrive in 2024. At the same time, a report by the Economic Intelligence Centre (EIC) at Siam Commercial Bank warned that ‘zombie’ Thai firms, making up 18.5% of those operating, were holding back economic growth by using up resources and reducing competitiveness, another negative impact of the previous government’s generous supports during the pandemic shutdown.

Some truth being spoken at last.

[spidermike007]

This exceedingly reckless administration engaged in multiple, highly selective economic shutdowns, that favored their cronies, and punished the masses. They also kept the nation closed off for far too long, and decimated tourism. Then they partially re-opened, with draconian restrictions.

So, if you want to put the blame in the place it belongs, blame Prayuth and Prawit. They are the architects of the downfall of Thailand, the increased suicides, homelessness, crime, unemployment, and unhappiness of the people. How and why was this disaster inflicted upon the economy? I would go one step further, and include the Prayuth Decimation as one of the causes of the economic stagnation we are seeing now. This was not entirely circumstantial, and the revisionist history is already beginning, it would appear. So many things could have been done, to ensure a softer landing, when covid was not a factor anymore. The highly selective economic shutdowns which favored cronies, at the expense of the average Thai were punitive and extremely damaging, resulting in higher suicides, homelessness, crushed lives, countless lost businesses, and a further spread of the disease. 

The destruction of the tourism industry (which some might argue was a purification campaign in disguise, meant to get rid of nightlife and the sex industry) went on far longer that it should have, leading to far fewer tourists returning here, as the nation has largely been forgotten. The restriction were way too much, for far too long.

I know taking responsibility for one's actions is not exactly a strong suit here. But, Prayuth, Phiphat, Prawit, and Anutin are directly responsibility for much of the economic woes we are seeing now, and should be held responsible, and called out on this. The numbers do not even begin to reflect the amount of damage done to the cash economy, which is never counted in unemployment numbers, lost GDP, lost businesses, etc. Covid was one small factor. Irresponsible actions, an extraordinary lack of leadership, choosing a vaccine with the lowest efficacy available, refusing help from the international community with the vaccines, until it was too late, and showing extreme cowardice by keeping the door to tourism closed for far too long, and then opening with draconian restrictions, were huge mistakes, and someone needs to be held responsible.