Relationship Between Loans to Household and Gross Domestic Product in Thailand

Abstract

This study aimed to the relationship between Real Gross Domestic Product (GDP) The research employed using the Engle-Granger cointegration test, the Error Correction Model, and the Granger Causality Test with quarterly time series data from the first quarter of 2013 to the fourth quarter of 2023, totaling 44 observations. The cointegration test was conducted between Economic growth represented by Real Gross Domestic Product (GDP) and overall loans to households, as well as six specific purposes of borrowing, including real estate purchases, vehicle purchases or hire purchases, education, other personal consumption, own businesses, and other purposes (comprising investment in securities and loans that cannot be classified). The study found short-run and long-run relationships between the examined variables, except for loans for education. The results of the Granger Causality Test indicated that loans for real estate purchases (REP) are a unidirectional cause of GDP, in contrast, GDP and loans for other personal consumption (OPC) are mutually causal, bidirectional causality. Additionally, GDP is a unidirectional cause of loans for own businesses (OB).