Thai economy not good, with growth worsening: Finance Minister Pichai
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Thai economy not good, with growth worsening: Finance Minister Pichai

Finance minister hopes central bank would relax loan-to-value regulations for mortgages

An aerial view of Bangkok’s high-rise residential and office buildings. (Photo: Nutthawat Wichieanbut)
An aerial view of Bangkok’s high-rise residential and office buildings. (Photo: Nutthawat Wichieanbut)

Thailand's economy has not been good for a long time, with growth deteriorating as it faces structural problems, Finance Minister Pichai Chunhavajira said on Wednesday.

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

Southeast Asia's second-largest economy expanded 1.9% last year, lagging regional peers, as it faced weak exports and high household debt and borrowing costs. Average economic growth was 1.73% over the past decade.

Mr Pichai said tourism would help drive the economy, as at least 35 million foreign tourist arrivals were expected this year. In 2019, before the coronavirus pandemic, there was a record of nearly 40 million visitors.

Deputy Prime Minister and Finance Minister Pichai Chunhavajira. (Photo: Chanat Katanyu)

Urgent household debt problem

He also said current household debt at more than 90% of gross domestic product (GDP) needed to be urgently tackled amid rising bad loans.

The minister added that he was hoping the Bank of Thailand (BoT) would relax loan-to-value regulations for mortgages to support the property sector. 

The sentiment index for housing developers in Greater Bangkok dropped in the second quarter to its lowest level in 15 quarters, dating back to the third quarter of 2020 during the Covid-19 pandemic.

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