Thai current account turns to deficit in January as gold imports jump

THAILAND recorded a current account deficit of US$191 million in January, following a surplus of US$2.1 billion in the previous month, due to a trade deficit driven by higher gold imports, the central bank said on Thursday (Feb 29). Exports in January climbed 7.2 per cent from a year earlier while imports rose 1.5 per cent year on year, creating a trade deficit of US$1.1 billion, the Bank of Thailand (BOT) said. “The current account balance was slightly in deficit, mainly due to the trade balance that turned to deficit due to higher imports of gold,” assistant governor Chayawadee Chai-Anant told a news briefing. Excluding gold imports, the current account would be slightly in surplus, she said without giving details. Gold imports surged nearly 230 per cent year on year in January. In January, the economy improved from the previous month due to rising exports, but was still growing slowly, the BOT said, adding that economic activity in February was supported by consumption and tourism. Thailand received nearly six million foreign tourist arrivals from Jan one to Feb 25, up 48 per cent year on year. The BOT said it would closely monitor the global economy, impact from geopolitical conflicts and the path of Federal Reserve interest rates. This month, the central bank in a split vote left its key interest rate unchanged at 2.5 per cent, the highest in more than a decade, resisting government pressure to ease. It will next review monetary policy on Apr 10. Prime Minister Srettha Thavisin, who is also finance minister, has been at loggerheads with the central bank over the direction of monetary policy. He has said repeatedly that rate cuts would help an economy he describes as being in crisis as it confronts high household debt and China’s slowdown. Central bank chief Sethaput Suthiwartnarueput has openly disagreed with Srettha, and says Thailand’s issues are structural, and cutting rates or pumping stimulus into the economy, as the government is proposing, would not address weaknesses. Earlier this month, the BOT lowered its 2024 economic growth outlook to 2.5 to 3 per cent from 3.2 per cent. The economy grew 1.9 per cent last year. REUTERS