Mr. Mathee Supapongse, Director, Monetary Policy Group: The economy in July grew at a decelerating pace from the previous month in line with softening private consumption, export and production sectors due partly to temporary factors and recorded-high economic activities in June. However, tourism sector continued to expand particularly from resuming trips of tourists from ASEAN countries and China. Meanwhile, private investment improved constantly.

In 2009, the overall economy contracted by 2.3 percent year-on-year (yoy), the first time in a decade, due to the global financial crisis which significantly affected Thailand’s major trading partner countries. As a result, the Thai exports sharply shrank which also caused continuing impacts on manufacturing productions, business confidence, as well as domestic consumption and investment.

In 2009 Q3, respondent financial institutions kept their credit standards for corporate loans unchanged from the previous quarter for the first time since the survey had been conducted in 2007 Q4, less tightened than their expectations in the 2009 Q2. Meanwhile, credit standards for housing loans had been eased slightly. This reflected respondent financial institutions’ lower risk perception due to improved general economic conditions and industry-specific outlook, together with the acceleration of credits extension by specialised financial institutions under government stimulus packages.

International Monetary Fund Washington, D.C. USA

WE – MPG is a monthly analysis on hot issues by BOT’s young economists. (available in Thai only)

BOT Research Newsletter is a research news series disseminated by the Economic Research Department, Bank of Thailand (BOT). This series will summarize the research papers written by researchers from the Economic Research as well as other Departments and, occasionally, from other central banks or academic institutions. The aim is to make research works of BOT and the Monetary Policy Group accessible to the general public, share latest development in academic researches as well as to stimulate research environment within the BOT.