Kittipong Taichareon and Oratai Thrilling
BANGKOK (Reuters) – Thailand's economy is not doing well and its property sector needs urgent support due to sluggish demand and rising bad loans, Thailand's finance minister said on Wednesday.
Finance Minister Pichai Chunhavajira told a business seminar the government is working to raise economic growth this year to 3 percent from a current forecast of about 2.5 percent, adding that that compares with past growth rates of nearly 6 percent.
“The economy hasn't been doing well for a long time, growth is worsening, we have structural problems,” he said.
China, Southeast Asia's second-largest economy, grew its economy 1.9 percent last year but its average growth rate over the past decade was 1.73 percent, lagging other countries in the region.
Pichai said tourism would be an economic driver, with foreign visitor numbers expected to reach at least 35 million this year, up from a record 40 million in 2019.
Pichai told reporters that he would talk to the central bank about relaxing loan-to-value (LTV) rules – the percentage of a property's value that can be offered as loans – to support the real estate sector.
“The real estate industry is in trouble,” he said, adding that he would like to see LTV regulations relaxed.
The central bank said the current LTV standard for primary residential properties, at 90% to 100%, remains appropriate.
Pichai said state-owned banks would help borrowers restructure their debt, while commercial banks would be asked to help address rising household bad loans.
To support the Stock Exchange of Thailand, Pichai said the government plans to expand the size of the Vayupac Mutual Fund for stock investments to 150 billion baht ($2.75 billion to $4.13 billion) from 100 billion baht by October.
Thailand's main stock index has fallen 6.6 percent so far this year, making it Asia's worst-performing market.
(1 dollar = 36.36 baht)
(Reporting by Oratai Thrilling, Kittipong Taichareon and Tanadek Sutthapongchareenchai; Editing by John Mair and Michael Perry)