Friday, October 17, 2008

BoT chief warns of spread of financial crisis to Thailand

BANGKOK, Oct 18 (TNA) – Bank of Thailand (BoT) Governor Tarisa Watanagas on Friday indicated the overall Thai economy and loan extension would grow at a slower pace next year because the global financial crisis is expected to spread to Thailand.

She said the world financial meltdown would definitely affect the Thai economy sooner or later.

A close watch on the situation must be kept because no one dared project the direction of the crisis. Mrs. Tarisa indicated.

However, she revealed the economy had still expanded rather satisfactorily.

"The financial crisis is expected to gradually affect the economy. Next year, the impacts will be more severe than this year," she advised.

"With economic sluggishness, everyone must adjust oneself. Exporters in particular must brace for the volatility of the global financial crisis and economic slowdown of trading partners.

Thailand must increase local demand and restore confidence for the sake of economic growth, she explained.

Mrs. Tarisa said that employment in Thailand had not yet been affected by the global financial crisis.
Overall, incomes earned by workers had not fallen to a worrisome level. The number of jobless is smaller than that of other countries affected by the bubble burst.
While the asset value of the affected countries had dropped, that of Thailand had not.

The key to solving the problem, she suggested, is to restore confidence so that the public would turn to spend more.
Regarding liquidity in the financial system, the BoT chief said it is sufficient to lending to the country's economic sector.

She conceded some banks are reluctant to lend under the current economic slowdown situation as reported because they had to be more careful regarding extending loans. (TNA)


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