Thailand’s economy will continue to recover this year and in 2023, and gradual interest rate hikes remain appropriate, however policy can be changed if the outlook differs from expectations, according to the Bank of Thailand on Monday.
The central bank has predicted GDP growth of 3.3% for this year and 3.8% for next year.
Last month, the BOT raised the monetary policy rate by 25 basis points, hiking its benchmark to 1% in a battle to tame inflation and protect the Thai baht from sliding against the US dollar. The second-straight 25bps raise was in line with expectations.
The bank stated that the economy posed no significant risks, and that monetary policy would bring a recovery without increasing inflationary pressures.
BOT expects a modest decline in inflation beginning in the fourth quarter of this year.
A rebound in the tourism sector will be key to the recovery of the Thai economy, the BOT added.