Thai economy to grow 3-4% this year, policy rate to ensure recovery

THAILAND’S economy is expected to expand 3 per cent-4 per cent this year and monetary and fiscal policies must work together to ensure economic growth and stability, the finance minister said on Wednesday (Mar 22).

South-east Asia’s second-largest economy continues to be supported by the vital tourism sector while exports weaken as global demand slows, Arkhom Termpittayapaisith told a business seminar.

The number of foreign tourist arrivals could reach 27 million this year, up from last year’s 11.15 million, he said.

As inflation eases, there is no need for Thailand’s monetary policy to follow US monetary moves, Arkhom said.

“The direction of the Thai policy rate will not follow that of the US, and it must ensure the economy can fully recover,” he said.

The Bank of Thailand is expected to raise its key rate by a modest quarter point at its next meeting on March 29.

Arkhom reiterated there has been no impact on Thailand from the problems in the global banking sector.

Thailand’s fiscal position was stable as its public debt – at 61.26 per cent of gross domestic product (GDP) as of February – was not very high, and foreign debt was also low, he said.

As Thailand will hold an election on May 14, government spending should continue as usual but there may be some impact on new investment projects before a new government is formed, Arkhom told reporters on the sidelines of the seminar.

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The baht currency is likely to remain volatile, driven by external factors, but its moves have stayed within a range seen earlier in the year, he said.

“I want the baht to be stable, but (we) should not look it daily,” he added. REUTERS