The Bank of Thailand expects the current negotiations in the United States on raising the country's debt ceiling to go smoothly, given that Congress already agreed on some issues late last year. Meanwhile Thailand, despite an economic slowdown, has encoun
BOT spokeswoman Roong Malikamas said that even if the US negotiations lasted beyond yesterday’s debt-ceiling deadline, it might not affect the US economy or government creditability This is because the US government will be able to manage some expenditures in the short term without a default.
In response to concerns over possible US economic problems that would affect Thai exports, Roong said that although some US economic figures have been lower than expected, they still reflected continuous improvement The overall US economy is still on a recovery path.
Here at home, she said Thai gross domestic product was projected to expand at a low level for the first half of the year, and therefore the central bank’s Monetary Policy Committee had lowered its full-year growth estimate from 4 per cent to 3 per cent.
But despite the slowdown, she expressed no concern on NPL rates, which have stayed low so far Both lenders and borrowers are exercising caution, while the commercial banks enjoy strong financial status and have set high loan-loss provisions, while also helping customers such as small and medium-sized enterprises Commercial banks are well prepared to act as financial intermediaries amid the economic slowdown.
January’s year-on-year inflation rate rose to 1.93 per cent from December’s 1.67 per cent, reflecting rising costs including energy prices.
"Based on a survey of [business] operators, most expect costs in the next 12 months to edge up by 3-4 per cent, close to estimates in the previous period," she said
Given this expectation, it is unlikely that product prices will decrease broadly – a deflationary scenario – as price setters have confronted higher costs and expect to raise their product prices.
In the third quarter of last year, household debts stood at 80.1 per cent of GDP, compared with the previous quarter’s 79.2 per cent, given slowdowns in both loan expansion and economic growth The household debt-to-GDP level is expected to rise again slightly for the final quarter of 2013.
The BOT continues to monitor the household-debt situation closely, she added.