BANGKOK, 17 May 2011 – Thailand’s financial status remains strong compared with the 1997 economic crisis, according to the Fiscal Policy Office (FPO).
Citing the analysis of 14 economic indicators used in the financial early-warning index measurement, FPO Director Dr Naris Chaiyasoot elaborated that the index for March 2011 stood at 6.74, which could be interpreted that the country’s financial status was very strong when compared to the economic crisis in 1997.
The director pointed out that the only indicator signalling financial early-warning was the cash balance in the treasury account, excluding loan repayment; however, the deficit in the cash balance was intentional following the needs to stimulate the economy of the government.
As of March 2011, the government had a cash deficit of 58 billion baht, exceeding the normal amount by 6.3 billion baht. The government had compensated for the deficit by borrowing via issuance of bonds and using the treasury reserves.
Given that there are no significant changes in government policies, Dr Naris disclosed that the financial crisis probability for Thailand in the next 24 months is at about 0.05, which is very low compared with the figure during 1997 economic crisis of 0.70-0.96.
The director termed this only irregular indicator as not worrying. He noted that there were five to nine indicators signalling early warnings simultaneously and continuously for over 10 months during the 1997 economic crisis.
