Financial crowding out to provoke higher Thai lending rates: Citi

09 Mar 2012

The government’s US$11.4 billion flood work project combined with local private companies’ capital expenditure could lead to a financial crowding out and a rise in interest rates, says the bank.

The timing and size of fiscal borrowings for flood work and waterway projects amid other financial activities – like supporting consumption and investment activities – of the central bank would put pressure on interest rates and “may give the impression of financial crowding out”.

While replacement capital expenditure by ...

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