Jada Wattanasiritham, Siam Commercial Bank's president and chief executive officer, said that it was imperative for consumers, especially the lower middle class, to maintain financial discipline.

"Each person should know his or her payment ability," she said.

While consumers should be careful, companies have less to worry about, however. Corporations have continued servicing their debts regularly and they can borrow more, she said.

"The political vacuum has not had any impact on the financial position of corporations. Their debt-to-equity ratios are an average of 1-to-1 only," she said.

Bangkok Bank vice president Shoke Na Ranong said that no matter how many difficulties skyrocketing oil prices have caused people, they should try their best to honour their debts in order to keep their credit records clean. He suggested that customers talk to their banks directly and sort out ways to handle their debts before they blemish their records with the Credit Bureau.

"If the economy recovers and you are looking to expand your business, your flawed credit record will affect you," said Shoke.

So far, the bank has seen a marginal increase in the default rate among its credit card customers.

"The rate slightly has increased from 1.3 per cent of its credit cards at the end of last year to 1.5 per cent recently. However, the bank has been using risk management and maintained the minimum rate of repayment at 10 per cent of each customer's outstanding debt based on the Bank of Thailand's regulations," said Shoke.

Non-performing loans at the bank accounted for 8.2 per cent of its total loans in June, up from 7.97 per cent at the end of March.

Santi Vilassakdanont, chairman of the Federation of Thai Industries, said the industrial index in May and June dipped below the 100-point threshold, reflecting falling consumer confidence. The situation will improve if government spending rises in the second half of the year.

Jiwamol Kanoksilp,

Piyarat Setthasiriphaiboon

The Nation