(Source Bank Of Thailand, table FI_CB_015_S3).
The growth of total outstanding credit for businesses recorded a drop of 7% in october (-6,4 % in september), compared to october 2008.
Overall, we still have a growth of 3,8 % year on year, at 7 623 billions THB.
Slowely, but surely (?) the credit belt is tightening. Sure, it could be worse. But the trend is not really euphoric for businesses.
By the way it’s interesting to look at the weight of each group :
In % of the total amount of outstanding credit, the part for businesses went from 60 % in 2006 to 47 % in october 2009.
And the part of “domestic banks and financial institutions” is catching up.
Anyway. It doesn’t prevent the Bank Of Thailand to make comments, coming out from outer space.
Commercial bank lending was likely to increase by five to nine per cent in 2010, the Bank of Thailand forecast on Thursday. Central bank deputy governor Bandit Nijthaworn said bank loans should rise next year as loan figures in October rose 0.2 per cent year-on-year and 0.4 per cent from September. Lending declined in the first nine months of this year due to the sluggish economy.
Mr Bandit said loans should move positively next year because the actual liquidity was five-times more than the required amount. The amount available would be adequate for commercial banks to support the business sector. (Bangkok Post)
9 % ? And why not 25 % ? ! It’s laughable. And as usual we can admire the perfectly non sensical and twisted inference made by thai officials. Let me highlight the key point : loans will go up because… there are liquidities !
This guy is so dumb, it’s scary.
The rule is : credit = solvent demand + means (liquidities).
It means : even if there are tons of cash, but NO (SOLVENT) DEMAND BECAUSE… for instance… an economic crisis (hello, you remember ?) then there will be no loans. I repeat : banks won’t lend.
Banks won’t lend to please the BOT, Korn (the alleged Finance Minister), Wall Street, the panda in Chiang Mai’s Zoo or Santa Claus.
Businesses won’t ask loans to invest if there is no demand for more goods, more production. However, they might looking for money… just to survive. And in this case, the banks won’t lend. Too risky. Vicious circle.
Credit is not, should not be like a living creature. Credit is a mean. Not an end.
And this is precisely what was forgotten by all the clowns around the world. And this is precisely the cause of the Big Crisis : free money pushed into the throats of millions of people and businesses, in the name of “economic growth”, when in facts the proper name was : Ponzi Scheme.