THE price of the financial crisis Thailand has to pay is enormous, amounting to about Bt5 trillion or the equivalent of the gross domestic product this year, according to a study conducted by Deputy Finance Minister Pisit Lee-ahtam and his team.

In a research entitled ''Study of the Financial Problems in the Financial Sector'', Pisit arrived at the figure by quantifying the financial losses to the private sector arising from the economic crisis over the past two years, from January 1996 to December 1997.

Losses incurred from the meltdown of the stock market, in terms of capitalisation, amounted to Bt2.61 trillion, according to the study.

Losses as a result of bad debts as reported by the commercial banks, finance companies and securities companies could reach Bt541.50 billion. This amount was about 50 per cent of the Bt1.08 trillion in bad debts, which represented about 19 per cent of total loans of Bt5.7 trillion in the commercial bank and finance company systems, the study said.

By international standards, about 50 per cent of the bad debts are normally recouped after debt restructuring or liquidation.

The losses also extended to the domestic bond market, which was deprived of liquidity. ''This is especially the case for corporate debentures worth Bt187.70 billion, with the exception of a few which may still have some liquidity,'' the study said. ''Additionally, there are still a number of short-term corporate debt instruments whose losses could not be estimated.''

The baht devaluation also inflicted massive losses to foreign currency-denominated debts of Thai companies, which had outstanding balance of debts of US$75.60 billion. ''With the exchange rate at Bt47 to the US dollar at the end of 1997, or a devaluation of Bt21, it is estimated that losses to the private sector are about Bt1.6 trillion,'' the study said.

Losses incurred from the lack of liquidity due to the outstanding Bt196.10 billion in promissory notes deposited at the permanently closed 56 finance companies. The notes are now placed under the exchange programme with Krung Thai Bank and Krung Thai Thanakit Finance & Securities.

This outstanding amount lacks liquidity since it is not transferable and can only be converted into cash after five years for larger amounts and cannot be used for other purposes. Shareholders' equity of the closed-down unlisted finance companies has been valued at zero. The book value of the shareholders' equity is Bt18.78 billion.

''Overall, the losses have severely affected the balance sheets and financial positions of the private sector. In addition to the financial assets, the real estate assets can no longer be easily liquidated,'' the study said.

''Real estate assets have been left without interested buyers and face drastic price adjustment, leading to a recession in the property market. Consequently, those who have owned assets and who used to be creditworthy in the past will find themselves in a completely different position to the huge losses.''

Moreover, the study found that private sector borrowings dropped 71 per cent from Bt1.5 trillion in 1995 to Bt447.1 billion in 1997. By early 1998, private borrowings declined to the negative level, the study said.