19-7-2023 (BANGKOK) Thailand’s economic recovery remains on track, with the Bank of Thailand’s (BoT) governor, Sethaput Suthiwartnarueput, projecting growth of 2.9% in the first half of this year and a further 4.2% in the second half. Speaking at a media briefing, the central bank chief affirmed that the BoT would continue gradually normalizing interest rates to support the economy’s potential growth and control inflation.
Mr. Sethaput highlighted that despite growth in the second half, exports are expected to remain flat for the entire year. Additionally, the country is anticipated to welcome approximately 29 million foreign tourists in 2023.
Despite a decrease in inflation, the central bank is likely to raise rates further at its upcoming meeting on August 2, as the country’s economic recovery continues. Thailand’s annual headline inflation rate fell to 0.23%, the slowest pace in 22 months, well below the BoT’s target range of 1% to 3%. Meanwhile, the core inflation rate stood at 1.32% in June.
The BoT has already increased its key rate by a total of 150 basis points since August, setting it at 2% to tackle inflationary pressures. While core inflation remains elevated, the central bank is focused on stabilizing prices and supporting economic growth.
In May, the BoT maintained its forecasts for economic growth at 3.6% for 2023 and 3.8% for the following year. The Thai economy had expanded by 2.6% in 2022.
In the first quarter, Southeast Asia’s second-largest economy exceeded expectations by registering a growth rate of 2.7% compared to the previous year, as the crucial tourism sector showed signs of recovery.
As of July 16, the Tourism and Sports Ministry reported that Thailand had received 14.15 million foreign visitors, with a total spending of 588 billion baht (US$17.11 billion) since the beginning of the year. The number of foreign visitors is expected to surpass 15 million by the end of July, indicating positive developments in the tourism industry.
