Funding risks

20 May 2013 By Andy Mukherjee

A 2.2 pct slide in first-quarter GDP increases political pressure on the central bank to cut rates. That will put off savers and stimulate borrowing when loans are already at a 13-year high. Funding a credit binge in a slowing economy with foreign money is risky for Thai banks.

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Thailand’s economy shrank a worse-than-expected 2.2 percent in the first three months of 2013, compared with the previous quarter, the government said on May 20.
Economists polled by Reuters had expected a 0.8 percent decline. The National Economic and Social Development Board, which compiles GDP data, cut its 2013 export growth estimate to 7.6 percent from 11 percent earlier.
Shares of Bangkok Bank, the country’s biggest lender, were down 0.45 percent at 1:30 p.m. (10:30 GMT), while those of smaller rival Krung Thai Bank and Kasikornbank were up 0.42 percent and 0.93 percent, respectively.

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