Bad loans, shouldered by state-owned specialised financial institutions (SFIs) in particular, are the key risk for the Thai economy in 2014, says Raymond Maguire, the head of research and strategy at UBS Thailand.
Tighter rural credit lending and the price pullback of the government’s rice pledging scheme will contribute to lower spending power for rural communities and low-end consumers, says Mr Maguire. PORNPROM SATTRABHAYA
"Two SFIs have already needed capital bailouts, but the good news is they are small and can be managed. That means this will not translate into a systemic risk or a banking crisis," he said, noting there is a tail risk to the bailout for the economy.
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