Demand for loans in 2Q10 is expected to continue rising

BANGKOK, May 2 (TNA) — The demand for loans during the second quarter this year is projected to continue increasing, according to a senior Bank of Thailand (BoT) official.

Suchart Sakkankosone, senior director of the BoT Domestic Economic Department, said demand for loans during the period is expected to continue rising because of needs by commercial firms and households and due to the relaxation of credit extension by financial institutions on the back of sustained economic growth.

The demand for housing loans is expected to fall below the first quarter of this year, however, even though tax reductions for new home buyers offered by the government is extended to end-May, said Mr Suchart.

It is expected that financial institutions would review trends for loan demand in the middle of this year after they have evaluated effects from the prevailing political unrest.

Loans extended by financial institutions to private sector in January and February this year grew 3.3 and 4.6 per cent respectively from the same period of 2009, thanks to demand by the household sector, he added.

Meanwhile, the prevailing political turbulence in Thailand has sharply impacted would-be private investors in the country as newly registered firms in April this year totaled only 3,485, down 30 per cent from the previous month and falling for the first time in 2010, according to a top Ministry of Commerce official.

Director-General Banyong Limprayoonwong of the Business Development Department said, however, that newly-registered firms in April rose 38 per cent from the corresponding period of last year.

Construction business topped the list of private firms that were registered last month with 289 companies followed by 262 in the entertainment field and 153 in the property sector.

Although the number of registered firms fell, their combined registered capital in April rose 46 per cent to Bt15.68 billion from March, Mr. Banyong said.

A total of 719 companies cancelled their commercial registration in April, down 27 per cent from March and 12 per cent from April 2009, he said. Most cancelling businesses were construction and property. (TNA)