Thai economy recovers because of low interest, says economist

BANGKOK, Sept 24 (TNA) – The Thai economy has recovered because of the low interest rate which helps reduce the private-sector costs, according to a veteran economist.

Narongchai Akrasanee, chairman of the Board and Chairman of the Executive Committee of MFC Asset Management Co., said the Thai economic recovery did not stem from the government’s stimulus measures.

There was a delay in the implementation of the measures, particularly the budget disbursement, causing a slowdown in the injection of money into the system.

In addition, the proceeds of around Bt100 billion used to stimulate the economy in the first phase is much smaller if compared with the gross national income of Bt9 trillion.

The government needed no additional stimulus measures, he said, but should accelerate implementing existing measures, disburse the budget swiftly, and jump start investment by the private and public sectors.

“The low interest rate helps shore up the global and Thai economies. Had the interest rate risen sharply, Thailand would have experienced a real economic crisis,” he said.

“With the low interest, many businesses can survive by themselves. The situation now is different from the economic crisis in 1997 when the interest rate surpassed 10 per cent. High interest rates caused many businesses to shut down,” Mr Narongchai said.

He projected the interest rate would edge up by 25-50 basis points next year. It would not adversely affect the economy because liquidity in the system remains excessive. (TNA)