(Source Bank Of Thailand, table FI_CB_015_S3).
Time to update the charts about total credit and type of debtors, at commercial banks.
The total amount (outstanding) of credit was 7 576 billions THB in april, a + 8 % compared to april 2008 (but far lower than +18 % y-o-y we had in january).
My bet : in a few months, the trend will turn negative. The recession virus is infecting, slowly but surely, the thai credit system.
(Credit = Overdraft + Loans + Bills)
Now with amounts :
The “plateau” is visible… Despite the hysterical calls from the government for the banks to lend more, to pump up more cash into the system… it’s obvious : banks won’t take the risks.
This basic, fundamental rule, is totally forgotten : during recession it makes no sense to :
-borrow more money (in order to invest, to increase production capacities when precisely demand is falling)
-and to lend more money (because risks are increasing)
… unless interest rates are very high (to pay for the risks)…
The clowns (all over the world) think that they can make businesses and individuals borrowing more money, and force banks to lend more during a recession… and at the same time keeping interest rates super low.