Economic news

Thai Finance Minister says economy not good, wants relaxed mortgage rules

2024.07.10 02:20

By Kitiphong Thaichareon and Orathai Sriring

BANGKOK (Reuters) -Thailand’s economy is not good and the property sector needs urgent support due to weak demand and rising bad loans, the country’s finance minister said on Wednesday.

The government was working to lift economic growth to 3% this year from current projections of about 2.5%, Pichai Chunhavajira told a business seminar, adding growth was low compared with rates of close to 6% in the past.

“The economy has not been good for a long time, with growth worsening. We have had structural problems,” he said.

Southeast Asia’s second-largest economy expanded 1.9% last year, lagging regional peers, with average growth at 1.73% over the past decade.

Pichai said tourism would help drive the economy, as at least 35 million foreign tourist arrivals were expected this year, compared with a record of nearly 40 million in 2019.

Speaking to reporters, Pichai said he would discuss with the central bank on relaxing loan-to-value (LTV) rules – the percentage of a property’s value that can be given as a loans – to support the property sector.

“The real estate business faces problems,” he said, adding he hoped the LTV rules would be eased.

The central bank has said the current LTV measures, at 90% to 100% for first residential properties, remain appropriate.

Pichai said state-owned banks will help with borrowers’ debt restructuring, while commercial banks would be urged to help tackle rising households’ bad loans.

Pichai said the government planned to increase the size of its Vayupak mutual funds by 100 billion baht to 150 billion baht ($2.75 billion to $4.13 billion) to invest in stocks by October to help the Thai bourse.

© Reuters. FILE PHOTO: Thailand's new Finance Minister and Deputy Prime Minister Pichai Chunhavajira reacts on the day of the cabinet meeting at Thai Government House in Bangkok, Thailand, May 7, 2024. REUTERS/Chalinee Thirasupa/File Photo

Thailand’s main stock index has dropped by 6.6% so far this year, becoming Asia’s worst performing market.

($1 = 36.36 baht)



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