BANGKOK- Thailand’s economy is not good and the property sector needs urgent support due to weak demand and rising bad loans, the country’s finance minister said on Wednesday.
The government was working to lift economic growth to 3 percent this year from current projections of about 2.5 percent , Pichai Chunhavajira told a business seminar, adding growth was low compared with rates of close to 6 percent in the past.
“The economy has not been good for a long time, with growth worsening. We have had structural problems,” he said.
Southeast Asia’s second-largest economy expanded 1.9 percent last year, lagging regional peers, with average growth at 1.73 percent over the past decade.
Pichai said tourism would help drive the economy, as at least 35 million foreign tourist arrivals were expected this year, compared with a record of nearly 40 million in 2019.
Speaking to reporters, Pichai said he would discuss with the central bank on relaxing loan-to-value (LTV) rules – the percentage of a property’s value that can be given as a loans – to support the property sector.
“The real estate business faces problems,” he said, adding he hoped the LTV rules would be eased.
The central bank has said the current LTV measures, at 90 percent to 100 percent for first residential properties, remain appropriate.
Pichai said state-owned banks will help with borrowers’ debt restructuring, while commercial banks would be urged to help tackle rising households’ bad loans.
