Thai economy still far from bubble: Research
Another economic bubble after the 1997 one is unlikely, despite the aggressive loan growth in the first half of this year, said Kasikorn Research Centre.
In its latest reserach, the house said that compared to the situation in 1997, Thai banks are much stronger. Meanwhile, thanks to proactive rules and regulations, banks' property-related loans are far lower than the 1997 level.
Kasikornbank CEO and president Banthoon Lamsam today also voiced concern over the rapid loan growth. To him, loan growth should not exceed the gross domestic product (GDP) level by more than two times. Bank loans expanded 16 per cent in the first five months of this year, against 5.5 per cent economic growth forecast.
Aside from the stronger banking sector, KResearch viewed that the economic fundamentals have differed sharply from 1997 when lax lending rules led to economic bubbles. At present, the economy is more balanced with the managed float currency regime as well as more reliance on domestic-sourced funds.
"Chances that the 1997 crisis would repeat itself are reduced significantly," it said.
