Private companies start to feel pinch of slowdown
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Thailand's economic growth prospect is skewed to the downside which now affects the private sector's debt financing ability and the banking sector's asset quality, said the Bank of Thailand.
In a statement issued after their first meeting in this year, the Monetary Policy Committee and the Financial Insitutions Committee however said that the problems have not yet led to a systematic risk, thanks to Thai banks' high capital level and loan-loss provisions. They also said that the Thai private sector, particularly large-sized companies, are financially strong and should be able to wither the risks for a certain period.
The committees noted that to be closely monitored is risks from slow economic recovery, aside from global economic uncertainties as well as the US rate hike.
The Monetary Policy Committee at the June 10 meeting revised down the 2015 economic growth forecast for the second time in this year, from 3.8 per cent to 3 per cent. However, it raised the 2016 forecast from 3.9 per cent to 4.1 per cent.
"This is because the possibility of weaker-than-expected growth due to the impact of more severe slowdown of China and Asian
economies is higher than the possibility of higherthan-expected growth from faster-than-expected disbursement of the stimulus package II," it said in a meeting minute.
