Thai economy will grow 3.0-3.5% this year, according to Finance Minister

The finance minister stated on Monday that the key interest rate should remain low in order to underpin recovery in the economy of Thailand, which could grow by 3.0%-3.5% this year, which is less than an earlier forecast due to the rising cost of oil brought on by the conflict between Russia and Ukraine.

Arkhom Termpittayapaisith, who was interviewed by Reuters, stated that the country’s economy, which is the second largest in Southeast Asia, will be supported by robust exports, which could grow by between 5% and 6% this year, as well as by improved tourism as a result of the government’s plans to ease more pandemic-related curbs.

“Growth of 3.0%-3.5% should be doable this year, and 2023 should be better,” he stated, in light of the fact that a number of government infrastructure projects will be completed that year.

After only expanding by 1.6% the previous year, which was among the lowest rates in the region, the state planning agency forecasted in February that the economy would increase between 3.5% and 4.5% this year. continue reading

According to Arkhom, growth in the economy is also anticipated in the first quarter, both on a year-over-year and a quarter-over-quarter basis.

He anticipated that there would be three million tourists from other countries visiting the country this year, which is a significant decrease from the forty million tourists that were anticipated to visit the country in 2019, before the pandemic.

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Monetary policy should continue to support the recovery, which is not yet in full recovery, while the government tries to manage higher inflation. Higher inflation is expected to be between 3% and 4% on average this year, which is slightly above the range that the central bank has targeted, which is 1% to 3%. He said that this should be done despite the fact that the recovery is not yet in full recovery.

He was speaking in reference to the country’s central bank when he added, “On the monetary side, don’t hike rates too soon.” He went on to say that full economic recovery is anticipated by the year 2023.

To continue providing assistance to the economy, the central bank has kept its benchmark interest rate at a historically low level of 0.50% since May of 2020. When it meets on Wednesday, everyone anticipates that it will not change its policies in any way.

Arkhom noted that the value of the baht at its current level is “acceptable” and helps encourage exports.

Even if the baht continues to fluctuate, the exchange rate of 33 baht to one dollar should make everyone happy.

According to him, the government possesses adequate cash to assist the economy, as evidenced by the availability of 75 billion baht as part of the existing plan to borrow money, and there is no requirement for additional borrowing at this time.

According to Arkhom, the ratio of the nation’s public debt to its GDP is projected to be 62% by the conclusion of the current fiscal year, which will end in September, and would grow to 67% in the fiscal year 2026.

The limit on the state debt was raised to 70% of GDP from 60% the year before in order to make room for additional borrowing in the event that it was necessary.