BoT watch on housing bubble

The Bank of Thailand is keeping a close watch for any indication of a pending collapse in the housing bubble after prices of housing estate units recently sharply increased, Mathee Supapong, a senior director at BoT, said on Friday.

  • Published: 5/10/2012 at 04:42 PM
  • Newspaper section: breakingnews

Housing loans provided by financial institutions were also substantially up and this was a case to concern, said Mr Mathee.

It is usual for the central bank to step in to oversee any unusual rises, he added.

The 3.38% inflation figure reported by the Ministry of Commerce in September was relatively high when compared to last September, but it was not worrying because it was based on the low inflation rate last year. The central bank was not surprised by the high figure, he said.

The BoT projected the general inflation rate for this year at 2.9%, while it is forecast at 3-3.5% by the Ministry of Commerce and at 3% by most research agencies.

He said the central bank had monitored the impact of the third round of the quantitative easing measures implemented recently by the US Federal Reserve and found that it was minimal and caused no pressure on inflation.

On the problem of inflation pressure over the remaining months of the year, Mr Mathee said it was not worrying as global oil prices were not fluctuating much.

In addition, the government had extended the diesel excise tax exemption and this would help minimise  inflation pressure.

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