Consumer loans grew by an annual 30 per cent in June, outstripping credit growth in the real and service sectors combined, the Bank of Thailand said last week.

Central bank data reveal consumer loans grew far more quickly than the 8.9-per-cent expansion rate for overall credit, as calculated by the BOT's Monetary Policy Group.

Consumer lending in June also expanded more than in March, when the yearly growth rate was 24 per cent.

Accelerating consumer-loan growth was attributed mainly to increased hire-purchase credit for cars and motorcycles, which increased fourfold year on year to Bt167.1 billion as at end-June.

BOT assistant governor Krirk Vanikkul said the increase in hire-purchase credit was also due to this type of loan being extended by Thanachart and Kiatnakin banks - both of whom have only recently been registered as banks.

"Consumer lending grew normally. The central bank has already issued measures to control it. We continue to closely monitor it, and do not see growth as a concern. There is no specific action planned to cool it down," he said.

Central bank deputy governor Tarisa Watanagase said it used a base level when considering loan growth to allow for new banks entering the sector.

Earlier, the BOT's Monetary Policy Committee (MPC) expressed concern at growth in consumer lending.

It said such lending must be closely monitored, as overextending loans could affect the financial status of households.

"If the household sector does not slow down indebtedness amid decreasing ability to make repayments, household finances and the country's macroeconomy could be at risk," the committee said.

The MPC monitors lending in all sectors to watch for bubbles or other abnormalities.

According to BOT data, outstanding housing loans rose 15 per cent year on year to Bt616.8 billion in June, compared to 10.3-per-cent growth in March. Krirk was not worried about this increase, adding that home purchases continue in most economic environments.

In other service sectors, outstanding credit for hotels and restaurants in June was Bt215.8 billion - a 9.3-per-cent rise from the same period last year and higher than the 8.8-per-cent annual rise recorded in March.

Outstanding lending by commercial banks to the transport sector amounted to Bt256.3 billion in the month, growing 9.2 per cent year on year. Annual growth in March was 6.4 per cent.

Wholesale and retail credit in the system grew 4.9 per cent year on year in June, to Bt978.9 billion. Growth was running at a yearly 4.8 per cent in March.

Credit for the construction sector grew 11.3 per cent to Bt167 billion in June after a 1.2-per-cent contraction in the first quarter. The gas and water supply sectors had Bt117.5 billion in loans outstanding in June.

Credit extended to manufacturing was Bt1.57 billion, up 6.2 per cent year on year. Education loans grew 49 per cent, but total outstanding credit was low at just Bt167 million.

Anoma Srisukkasem

The Nation