The banking system's lending growth will remain strong even as applications for the first-time car buyer tax rebate dissipate, say Bank of Thailand officials.
Bank lending grew by 16% last year from 2011, and the trend should continue this year, said Krirk Vanikkul, a deputy governor.The central bank expects 2013 lending growth to be in line with GDP growth, which is likely to beat expectations.
"Banks are ready in terms of capital, liquidity and demand for lending," said Mr Krirk.
Lending growth will also get a boost from the lending and transfer of ownership of the remaining 700,000 cars under the government's tax rebate policy.
The scheme has seen 1.2 million applications in all, costing 100 billion baht in forgone tax revenue. Some 500,000 cars are expected to secure financing and be transferred to owners this year.
Paiboon Kittisrikangwan, an assistant central bank governor, said the Monetary Policy Committee expects better economic growth than earlier predicted.
Strong business and consumer confidence, rising household income, full employment and easy monetary conditions introduced last year should help to drive domestic demand, while the export outlook has improved along with the US and Chinese economies.
The central bank will probably revise its economic growth forecast upward from 4.6% based on better-than-expected growth in last year's fourth quarter, said Mr Paiboon.
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- Writer: Parista Yuthamanop