Bank of Thailand says economic stability strong, can handle external volatility

[BANGKOK] Thailand is economically stable and strong and can withstand increased global volatility, the central bank chief said on Tuesday.

The country has low foreign debt, high international reserves of more than US$200 billion and a current account surplus at 7 per cent of gross domestic product, Bank of Thailand Governor Veerathai Santiprabhob told a seminar.

However, the country faces structural challenges, including low labour productivity, a labour mismatch and low investment, he said.

High household debt remains a problem, equivalent to about 77.8 per cent of GDP, which is higher than those of countries with a similar income to Thailand, Mr Veerathai said.

The government's spending on social security and large investment projects and short-term populist policies are putting pressure on the fiscal position, he said.

It is estimated that the government will have to adopt a deficit budget for another 12 years, he said.

REUTERS