The Bank for Agriculture and Agricultural Cooperatives (BAAC) expects its loans to farmers in fiscal 2023 to expand by 2% from the previous year, says executive vice-president Paisan Hongtong.
In fiscal 2023, starting from April 1, the bank aims for agricultural loans to expand by 35 billion baht, or 2% growth from the outstanding loan balance of 1.63 trillion baht in fiscal 2022, which represented a year-on-year expansion of 1.9%.
Mr Paisan said the bank expects its non-performing loans this year to make up 6.7% of the outstanding loan balance, an improvement from 7.68% in the previous year.
In March, BAAC's Research and Innovation Development Center forecast Thai economic growth of at least 3.5% this year, driven by the continuous recovery of the tourism and service sectors, which have increased employment levels and household incomes. These factors have helped to boost domestic consumption.
In addition, the government has measures to accelerate the disbursement of investment budgets and government spending in 2023 to drive the economy, and measures to promote investment in new industries. All of these will help stimulate the country's investment atmosphere.
The agricultural economy is expected to expand by 2.4%, despite pressure from agricultural exports, which are expected to decline in line with the economic shrinkage of major trading partners such as Japan, the US, and Europe, as well as baht appreciation.
In the second half of the year, global climate change brought about by the El Niño phenomenon may affect the production of rice, maize, and cassava.
Moreover, the downward trend in crude oil prices also affects the movement of rubber prices and palm oil prices.