Thailand is catching up with the global trend : a tightening of credit.
And it’s perfectly normal : amid a full blown global recession, it makes no sense for a bank to increase its credit lines, even though the politicians and the clowns ask them to.
We have -rigthly- criticised the banks for reckless lendings… it’s not the time now to criticize them when they start to be more cautious !
Let’s repeat the golden rule : it makes so sense to lend money in order to increase production capacities (or to build more houses) during a recession. Demand is falling, and insolvency is rising (unemployment) and risks are rising.
So a few month ago, the total credit (commercial banks) was still growing 18 % year on year… but in march, the growth year on year fell to 10,9 %. And it will continue to decline. Slowly but surely.
(Source Bank Of Thailand, table FI_CB_015_S3).
Now let’s see with values.
You’ll notice that for businesses, the values are already decreasing !
One proof, from the ground :
United Overseas Bank (Thai) has slashed its loan growth target this year from 6-7 per cent to zero per cent after its loan portfolio shrunk by 10 per cent in the first three months of this year. […]
Early last month, TMB Bank also forecast that its corporate loans would flatten out this year in the bestcase scenario. (Nation)
But like everywhere else, they have tried to “boost” the system… the total is still growing, albeit (first chart) at a slower pace. But I think now it’s the tail… And we see already that this policy is a failure.
The ridiculous “stimulus song”, “bail out funk”, “boost rap”…. and all the Dildo Economy, all this keynesian crap just doesn’t work.
They have just gained a little bit of time… Very costly time.