Thailand’s economy is expected to grow 3.5% this year thanks to tourism and rising exports

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BANGKOK, June 28 (Reuters): Thailand’s economy is expected to grow by around 3.5% this year, driven by stronger tourism and exports, the finance minister said on Tuesday.

The Ministry of Tourism now expects 9.5 million foreign visitors this year, Arkhom Termpittayapaisith told reporters.

The government is also planning additional measures to help reduce the cost of living, he added.

Meanwhile, on Monday (June 27), Thailand’s central bank officials announced that a tightening of Thai monetary policy would be conducted so as not to disrupt the recovery of Southeast Asia’s second-largest economy, bolstering expectations. market for interest rate hikes later this year.

Thailand’s economy will continue to grow this year and next, driven by domestic demand and tourism, and could beat forecasts despite the risk of higher-than-expected inflation, Bank of China officials said. Thailand (BOT) at an analyst meeting.

The BOT will try to prevent the economy from overheating, which would lead to demand-driven inflation, by phasing out the current highly accommodative policy, Deputy Governor Piti Disyatat said at the meeting.

The BOT’s task was to help the economy take off smoothly, he said.

“It is a challenge for monetary policy to release the accelerator pedal in an appropriate and timely manner so that the recovery has a good momentum,” Piti said, referring to the current record high interest rate of 0.50%. .

The speed of the policy tightening would be determined by the data and would be in line with the associated risks, he said, adding that the BOT had no intention of creating surprises in the markets.

The BOT does not intend to hold a special policy meeting because the other three meetings scheduled for this year, scheduled for August, September and November, were still appropriate, he said.

The central bank will then revise its policy on August 10, when most economists expect the first rate hike since December 2018.

During the June 8 policy review, the BOT committee voted four to three to maintain the policy rate. The three dissenters were in favor of a quarter-point hike.

The BOT forecasts economic growth of 3.3% this year and 4.2% next year, while headline inflation is forecast at 6.2% in 2022 and 2.5% in 2023.

Although inflation exceeded the BOT’s 1% to 3% target range, the BOT saw no reason to adjust the target, which remains appropriate for the economy over the medium term, Piti said.

Senior director Sakkapop Panyanukul said inflation is expected to peak in the third quarter before gradually returning to its target in mid-2023.

While noting that a weak baht affected import costs, Piti said the currency could strengthen over the medium term as the dollar would not continue to rise once US monetary tightening keeps inflation in check.

Baht weakness was in line with regional currencies and the BOT would closely monitor and manage excessive volatility, senior manager Surach Tanboon said.

The policy tightening would also reduce exchange rate volatility and capital flows, he added. -Reuter

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