Thai growth on track if next govt formed by June: Central bank

Bangkok

THAILAND'S economy is expected to grow 3.8 per cent this year as forecast if the next government can be formed by June, the country's central bank governor said on Friday. Low inflation is not a concern and the central bank will focus more on growth and financial stability risks, Veerathai Santiprabhob told an analysts meeting.

Thailand held a general election on March 24 - its first since a 2014 coup that overthrew the previous government led by then-prime minister Yingluck Shinawatra - but the outcome stays uncertain and might not be known until after official results are due on May 9.

Pro-military and anti-junta parties are tussling to form a government after a disputed and inconclusive general election held in March, following almost five years of military rule.

The central bank has left its policy interest rate unchanged at 1.75 per cent since tightening last December for the first time since 2011. It will next review policy on May 8.

Thailand - the second-largest economy in South-east Asia - reported its strongest economic growth in six years in 2018, at 4.1 per cent, but still lagged behind the Philippines' 6.2 per cent, Indonesia's 5.17 per cent and Malaysia's 4.7 per cent.

The political gridlock in Thailand is prompting the junta to evaluate measures to shore up the country's slowing growth.

Finance Minister Apisak Tantivorawong on Friday said his ministry is considering steps to inject 20 billion baht (S$852 million) of stimulus into the economy. Growth may slow to the low 3 per cent range in the first and second quarters, he told reporters in Bangkok. "We want the measures to be effective during the second and third quarters in order to make sure the economy won't be slumping when the new government comes in," he said. The steps being mulled include tax breaks to spur tourism and assistance for people on low incomes, he said.

Some analysts are sceptical about the monetary authority's scope to add to its December 2018 increase in borrowing costs, the first since 2011, because of political risk and a challenging export outlook in the trade-dependent economy. Exports likely fell about 4 per cent in March from a year earlier, according to a Bloomberg survey ahead of the official report on April 22. That would be the fourth decline in five months. REUTERS, BLOOMBERG