THAILAND’S economy is expected to grow 3.6 per cent this year and 4.0 per cent next year, helped by a recovery in tourism despite inflationary pressures, a member of the central bank’s monetary policy committee said on Wednesday (Aug 17).

The forecasts compare with the Bank of Thailand (BOT)‘s official projections in June for growth of 3.3 per cent this year and 4.2 per cent next year.

The central bank earlier said growth this year could beat its forecast due to better-than-expected tourism. It is due to review its forecasts at the next rate meeting on Sep 28.

Despite headline inflation hovering around 14-year highs of 7.61 per cent in July, far above the central bank’s target range of 1 per cent-3 per cent, Kanit Sangsubhan said it was not that high and would fall back next year as oil prices drop.

He expected headline inflation at 6.3 per cent this year and 2.6 per cent next year, compared with the 6.2 per cent and 2.5 per cent forecast by the central bank in June, respectively. “Don’t panic. Inflation in Thailand is not high compared with other countries,” he told a business seminar.

Last week, the BOT raised its key interest rate for the first time in nearly 4 years, by 25 basis points to 0.75 per cent, to curb inflation and signalled further gradual hikes. REUTERS

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