19-7-2023 (BANGKOK) Thailand’s economic recovery remains on track, with the country’s central bank chief stating that growth of 2.9 percent is expected in the first half of this year, followed by a projected 4.2 percent in the second half. Bank of Thailand Governor Sethaput Suthiwartnarueput affirmed this during a media briefing on Wednesday.
Suthiwartnarueput emphasized that the central bank will continue its gradual normalization of interest rates to support the economy in reaching its full potential while also keeping inflation in check. He further mentioned that Thailand is anticipating the arrival of 29 million foreign tourists this year. However, despite growth anticipated in the second half, exports, which are a crucial driver of the economy, are projected to remain flat for the year.
Despite a decline in inflation, the central bank is expected to further increase rates at its upcoming meeting on August 2, in line with the ongoing recovery of the economy.
Thailand’s annual headline inflation rate dropped to its slowest pace in 22 months, recording 0.23 percent, significantly below the central bank’s target range of 1 to 3 percent. The core inflation rate stood at 1.32 percent in June.
To combat inflation, the Bank of Thailand has already raised its key rate by a total of 150 basis points since August, bringing it to 2 percent. The central bank had previously highlighted persistent elevated core inflation levels.
In May, the central bank maintained its economic growth forecasts, predicting a 3.6 percent expansion for this year and 3.8 percent for the following year. In 2022, the economy grew by 2.6 percent.
Thailand, as Southeast Asia’s second-largest economy, experienced a better-than-expected growth rate of 2.7 percent in the first quarter compared to the same period last year, largely due to the recovery of the vital tourism sector.
