Bangkok Bank official sees positive signs for Thai economy
Steady growth foreseen, with expectations for more than 3% growth in 2025
Kobsak Pootrakool, executive vice-president, company secretary, and executive director at Bangkok Bank Pcl (BBL), has commented on Thailand's economic outlook, noting that it is showing positive signs.
He anticipates that the economy will grow by just under 3% in 2024 given the late-year flood impacts in certain areas. But looking further ahead, he said the economy is “out of the thorny woods” and should maintain steady growth, with expectations for more than 3% growth in 2025.
The steady influx of around 4 million tourists monthly is projected to bring annual visitor numbers close to pre-Covid-19 levels, reaching about 36 million this year. Additionally, ongoing foreign direct investment (FDI) will further drive economic growth.
However, he highlighted three major concerns, or “landmines”, for Thailand’s economic stability:
- The outcome of the US election.
- China’s economic challenges, which he believes remain unresolved.
- Thailand’s household-debt level, currently around 89-90%, poses a significant threat. There are high levels of special-mention (SM) loans, with auto loans at 16%, and an increase in foreclosed homes.
Kobsak emphasised that the rise in household debt over the past few years is alarming, and said it must be addressed as it threatens sustainable growth by limiting effective stimulus impacts.
He observed that the recent trend of interest-rate cuts in some countries, including Thailand, is favourable for the economy and borrowers. However, it may take another six to 12 months before these rate reductions fully impact the economy.
Bangkok Bank projects that, given Thailand's GDP is expected to grow slightly below 3% this year, bank loans will grow at a rate more than double that of GDP, within a range of 3-4%.
The bank’s overall growth remains positive, having achieved robust net profits over the first nine months, with the third quarter marking the highest net profit among commercial banks.
While domestic lending has slowed somewhat in the business sector, international lending continues to rise.
Despite slower growth domestically, foreign loans have shown solid growth, particularly large and consumer loans, with sustained demand in Indonesia, Vietnam, and other countries expanding their manufacturing and investments, supporting ongoing growth in Bangkok Bank’s foreign income.
