Thai central bank says GDP could underperform next year

Bangkok

THAILAND'S gross domestic product could underperform next year if tourism remains weak, even as this year's economic performance may beat sharply reduced forecasts, the country's central bank head said on Friday.

All reasonable policy options are on the table in such a situation, although there's currently no need for the central bank to pursue quantitative easing, Bank of Thailand governor Sethaput Suthiwart-Narueput told reporters at a briefing in Bangkok. Monetary policy will remain accommodative and focused on growth, while fiscal stimulus should remain in place until the middle of next year, Mr Sethaput said.

"Monetary policy gives priority to growth now," he said. "We see that financial stability is linked to the revival of growth."

Thailand's economy, which is heavily reliant on exports and tourism, is expected to contract the most in more than two decades this year.

The National Economic and Social Development Council expects the economy to contract 6 per cent this year, compared to a 7.7 per cent fall seen by the Finance Ministry and the 7.8 per cent contraction the central bank predicted in September. The council has forecast 3.5 per cent-4.5 per cent expansion for next year, with the central bank expecting 3.6 per cent growth.

The Bank of Thailand may need to revise its forecast after third-quarter GDP came in better than expected, Mr Sethaput said. The Monetary Policy Committee will meet on Dec 23 to review the forecast.

Thailand's borders reopened to some foreign tourists in October for the first time since late March. BLOOMBERG