Thai central bank sees limited impact of global financial tightening

THAILAND’S economy should continue to recover and its overall financial stability remains sound, while financial tightening globally has had a limited impact on the country’s financial conditions, the central bank said on Monday (Dec 19).

A gradual rate increase is still an approach consistent with Thailand’s recovery and inflation outlook, but the central bank is ready to adjust the pace if the outlook shifts, it said in a statement issued for an analysts’ meeting.

South-east Asia’s second-largest economy will continue to be supported by a recovery in private consumption and the vital tourism sector, the central bank said.

The recovery and inflation outlook have been in line with expectations and long-term inflation expectations remained anchored, it said.

The central bank has forecast the economy will expand 3.2 per cent this year and 3.7 per cent in 2023.

The Bank of Thailand has raised its key interest rate by a total 75 basis points in three meetings since August. It will next review policy on Jan 25, when economists expect a further hike.

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The tightening cycle has been less aggressive than many regional peers as Thailand’s economic recovery has lagged that of other South-east Asian countries, with the crucial tourism sector only starting to pick up this year. REUTERS