Thailand's economy is likely to increase 3.5-4 percent this year, lower than the projected 5 percent, if global oil prices continue to soar, according to the Kasikorn Bank.

Kasikorn Bank President Prasarn Trairattanaworakul was quoted by Thai News Agency as saying Friday that Thai economy will grow at between 4-4.5 percent this year if oil prices hover around 80 U. S. dollars a barrel. Any further rise in fuel prices above the line could push the country's GDP growth down to 3.5-4 percent.

He predicted the Bank of Thailand would likely to hike the benchmark of 14-day repurchase rate by at least a quarter of a percentage point to 5 percent in line with the U.S. Federal Reserve Board.

This will make commercial banks in Thailand adjust their rates upward to place lending rates at 8-8.5 percent across the board. However, savings rates will vary depending on the liquidity situation of individual banks.

Prasarn pledged Kasikorn bank would stay committed to its business goal of increasing lending by 6-9 percent this year.

Excess liquidity within the banking system increased by 33 billion baht (875 million U.S. dollars) since the start of this year, with 17 billion baht (450 million U.S. dollars) held by big commercial banks and 15 billion baht (398 million U.S. dollars) among smaller banks.

Source: Xinhua