Thai economy continues to recover but faces more challenges: central bank

THAILAND’S economy continues to recover, but faces more challenges with policy priorities to ensure a continued rebound, the central bank chief said on Friday (Dec 16).

Further interest rate hikes would be gradual and measured, but the central bank is ready to adjust the pace, if necessary, Bank of Thailand (BOT) governor Sethaput Suthiwartnarueput told a virtual business seminar.

Aggressive rate hikes are not suitable as the economy is still in its early stage of recovery and supply-driven inflation is easing, he said.

The central bank has forecast the economy will grow 3.2 per cent this year and 3.7 per cent next year, with tourism and private consumption the key drivers.

High household debt could disrupt the economy and needed to be brought down to sustainable levels, Sethaput said.

The BOT has raised its key interest rate by a total 75 basis points since August. The tightening cycle has been less aggressive than many of its regional peers as an economic recovery has lagged that of other South-east Asian countries, with the crucial tourism sector only starting to pick up this year. REUTERS