* Sees 2017 banks' loan growth above last year's 2 pct rise
* Sees NPLs falling this year as economy improves
BANGKOK Feb 9 An improving Thai economy is
expected to see commercial banks' loan growth this year top the
2 percent rise of 2016, the central bank governor said on
Governor Veerathai Santiprabhob said businesses have been
accessing funds via the debt market to compensate for last
year's slowest loan growth in seven years..
"Loans are likely to improve from last year as bond yields
are higher, making debt issues more expensive, so operators
should return to bank loans," the central bank chief told
"As the economy is improving, we've started to see
investment in some businesses," he added.
As conditions become more positive, banks' non-performing
loans are expected to decline this year, Veerathai said.
NPLs had risen to 2.83 percent of total lending at the end
of 2016, from 2.55 percent at the end of 2015.
Faced with sluggish exports and domestic demand, the
military government has ramped up spending and investment
projects in a bid to revive growth in Southeast Asia's
second-largest economy, which lags regional peers.
Veerathai said the economic recovery had become
broader-based in several business sectors, especially in the
provinces benefiting from higher commodities prices and
On Wednesday, the central bank left its key interest rate
unchanged at 1.50 percent, where it has been since
Policymakers are counting on a solid uptick in spending to
support growth in the face of external headwinds, including from
protectionist policies under U.S. President Donald Trump and
expectations for a higher pace of U.S. rate increases.
The central bank is forecasting economic growth at 3.2
percent this year, with no export growth. It will review the
projections next month.
(Reporting by Kitiphong Thaichareon; Writing by Orathai
Sriring; Editing by Shri Navaratnam)