Thailand’s economic revitalization is progressing despite its slower-than-expected pace, especially in the key sectors of tourism and exports. This sentiment was echoed by Sethaput Suthiwartnarueput, Governor of the Bank of Thailand (BoT), in a recent business seminar. Sethaput shared his concerns about the unforeseen fall in exports and tourism expenditure, painting a challenging economic picture for the nation.
These hurdles notwithstanding, Sethaput remains positive about the country’s potential, anticipating that Thailand will see around 29 million international tourists in the current year.
The central bank has been proactive in their bid to shore up the Thai economy and check rising inflation. This led to a series of seven stepwise increases in its key interest rate, bringing it to 2.25% since the previous August. Sethaput acknowledged the potential inflationary pressure from the El Nino weather phenomenon, a known disruptor of agricultural output, which could inflate food costs.
Despite these factors, the top official asserted that the general course of the economic recovery remains unbroken, with only mild wavering in growth and inflation. The Bangkok Post cited him noting the likely downgrading of the yearly economic growth figure, falling shy of the BoT’s initial 3.6% projection. An updated estimate is slated for publication come this September.
The governor also discussed the key rate, highlighting its near-balanced status. Keeping the current investment climate in view, the rate could stay the same or see an upward adjustment at the next BoT meeting scheduled for September 27.
Thailand, holding the position of the second-largest economy in Southeast Asia, has had its share of economic hurdles. A combination of a worldwide growth deceleration, reduced trust from investors due to an extended government-less period after the May 14 General Election, and some friction with its prime trading partner, China, has made things challenging. However, a glimmer of hope comes with the anticipation of a new government formation in the near future. This optimism follows the royal approval granted to Srettha Thavisin, a representative from the Pheu Thai Party, to take up the role of prime minister after his parliamentary vote victory.
In his closing remarks, Sethaput clarified the BoT’s policy aim of achieving a balanced economic landing. He stressed on the need for careful planning for medium-term growth, forecasting a range of 3% to 4%, with an inflation target set between 1% and 3%.
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