The recent actions by the Bank of Thailand (BoT) follow a meeting between Prime Minister Srettha Thavisin and key bank CEOs, where the Prime Minister urged banks to lower lending rates for vulnerable groups. The BoT is collaborating with commercial banks to adjust their strategies to support at-risk customers.
Key Points:
- Commercial banks have been asked to decrease lending rates to protect vulnerable segments of society.
- The BoT’s Monetary Policy Committee has decided against cutting the current 2.5% rates.
- Thailand’s economic growth forecast for 2024 has been adjusted to 2.8%, down from the initial projection of 3.2%.
- Prime Minister Thavisin’s advocacy for lowering borrowing costs has influenced commercial banks to temporarily reduce rates for those in need.
Piti Disyatat, an assistant governor at the central bank, emphasized that banks have the flexibility to modify their operations, such as adjusting product offerings and interest rates to aid vulnerable borrowers. With Thailand’s household debt-to-GDP ratio relatively high at 91%, compared to other emerging economies averaging 60%, these initiatives are crucial.
Despite challenges like sluggish demand from key export markets and a global trend towards high-skilled services, there are hopes for economic improvement in sectors like cryptocurrency, technology, and tourism. Thailand’s economic success may hinge on navigating obstacles like low productivity and inadequate education to spur growth and innovation and avoid stagnation in the middle-income bracket.
