Thai Central Bank Sees Economy Recovering But Faces Many Challenges

Thailand’s economy is still recovering, but policy priorities should ensure a sustained recovery, according to the country’s central bank chief on Friday.

Further rate hikes would be moderate and measured, but the central bank is willing to shift the pace if necessary, said the Bank of Thailand (BOT) governor Sethaput Suthiwartnarueput at a virtual business seminar.

He believes that aggressive rate hikes are unsuitable because the economy is still in its early stages of recovery and supply-driven inflation is receding.

The central bank forecasts the economy will expand 3.2% this year and 3.7% next year, with tourism and private consumption driving growth.

Earlier this week, Minister of Finance Arkhom Termpittayapaisith stated at a World Bank event that Thailand can weather global uncertainties, with average inflation expected to be 6% this year, while maintaining his economic forecast for the country to grow 3.4% this year and 3.8% next year, boosted by a recovery in the vital tourism sector.

Since August, the BOT has hiked its benchmark interest rate by a total of 75 basis points.