The value of deposits under the supervision of the Deposit Protection Agency (DPA) in 2023 fell by 0.5% year-on-year, the first decline in a decade, attributed to the top and the bottom-tier deposit segments, said DPA president Songpol Chevapanyaroj.
In 2023, deposits amounted to 16 trillion baht, down by 80.4 billion baht or 0.5% compared with the previous year.
Mr Songpol said the factors for this shift came from two segments —deposit amounts not exceeding 1 million baht, and deposits exceeding 10 million baht.
Deposit amounts not exceeding 1 million baht (known as the low-tier segment) stood at 2.73 trillion baht, down by 32.5 billion baht or 1.18% year-on-year.
Due to the higher cost of living, attributed to rising inflation and interest rates, the DPA expects depositors would need more liquidity for routine spending.
“We forecast low-income earners, whose deposits do not exceed 1 million baht, to use the money for routine spending to support their liquidity shortage,” Mr Songpol said.
According to the DPA’s data, there are around 80 million individual deposit accounts with deposit amounts of less than 5,000 baht per account on average, he said.
The total amount of deposits has improved over the past two years as the economy gradually recovered from the impact of the pandemic.
Furthermore, the situation is expected to continue to improve as the tourism and service sectors rebound.
Mr Songpol said deposits in the top-tier segment, or those exceeding 10 million baht also declined last year.
Deposit amounts exceeding 10 million baht stood at 9.32 trillion baht, down by 85.7 billion baht or 0.91% year-on-year, as a result of the search for alternative investments with higher returns than deposits such as bonds, gold and real estate.
Deposits in the middle-tier segment from 1-5 million baht and above 5 million baht to 10 million baht, showed steady growth last year at 0.47% and 2.11%, respectively, with the proportion of deposit value in total at 17.7% and 7.38%, respectively.
Meanwhile, the top-tier segment made up the highest proportion of deposit value at 57.9%, with 16.5% for the low-tier segment.
Mr Songpol believes the total deposit amounts in 2024 would show positive growth supported by economic recovery. Normally, deposit growth would be in line with GDP growth.