(Source Bank Of Thailand, table FI_CB_015_S3).
The total credit (outstanding) at commercial banks was at 7 483 billions THB in june. That’s 131 billions less than may. But it’s still increasing by 7,5 % year on year (compared to june 2008).
Sounds good ? Well… look at the details.
Yes… Growth of credit for business is in negative territory (-1,3 %)... And it’s still decreasing for individuals.
Businesses are under pressure because of the recession.. and for some their cash bloodline is getting dry. And It makes perfectly sense : banks are not willing to increase lendings. Because risks are increasing. And because it’s absurd to add capacities during a recession.
At least, this is how It works in a “normal” system. In China for instance, when the politicians order the banks to increase lendings… the banks comply. And in a hurry (it would be so bad to end up in jail…)
That’s the beauty of communism if I may say. 😉 But of course It’s just another bubble (“property sales surge 60 %“), ready to burst. Anyway.
Now let’s look at the amounts.
Our dashing Prime Minister, Abhisit, told us that Green Shoots are to be seen everywhere, that the bottom is reached, that recovery is under way blablabla…
Looking at the figures provided by the BOT, his statements are just wishful thinking…
The credit party is over.
And the clowns should explain us how a system based on credit can continue to grow if the credit is drying up ? This basic question is a burning one in the US (read this striking article about the severe US consumer credit crunch).
But it’s much more entertaining and convenient to talk about Green Shoots Soup and Recovery Salad.
Bon appetit. And sleep good.
[ I’m taking holidays. See you last week of august. Until then, may the Crisis be with you and be ready for an exciting september 😉 ]