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Finmin: baht not very strong, reflects economic
fundamentals
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Says 2023 GDP growth may beat forecast of 3.8% this year
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Says foreign tourism numbers may exceed forecast
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Says monetary policy must ensure economy will fully recover
(Adds details, quotes)
By Orathai Sriring and Kitiphong Thaichareon
BANGKOK, Feb 13 (Reuters) - Thailand's economy could
grow faster than forecast this year as a revival in tourism
quickens, while the pace of monetary tightening to stave off
inflationary pressures remained "reasonable", the country's
finance minister said on Monday.
In an interview with Reuters, Arkhom Termpittayapaisith said
the Bank of Thailand had been aligning policy with the needs of
the domestic economy rather than mirroring the aggressive pace
of tightening by the U.S. Federal Reserve.
"Our central bank's interest rate adjustments have been reasonable, not following the Fed but consistent with our economy," said Arkhom. "Raising rates too much will sharply drag down the economy that is getting better," he said, adding monetary policy must ensure the economy would fully recover. The Bank of Thailand has raised the key rate by a total of 100 basis points since August to 1.50%. But its tightening cycle has been less aggressive than many regional peers, as Thailand's economic recovery has lagged other Southeast Asian countries as the tourism sector only started to rebound last year.
It will next review policy on March 29, when most economists see a further hike. Arkhom said Thai gross domestic product may beat a forecast of 3.8% growth this year on a rebound in tourism. "Tourism is playing a key role in supporting the economy ... there is a chance that tourist numbers will beat our forecast of 27.5 million this year," Arkhom said. TOURISM TARGET
Tourism will gather steam this year, with the return of
visitors from China, at least 7.5 million of whom are expected
to arrive this year following China's reopening, he said.
Thailand beat its tourism target with 11.15 million foreign
visitors in 2022, but was still far from a record of nearly 40
million in pre-pandemic 2019.
For 2022, he expects Southeast Asia's second-largest economy
to grow about 3%, after a 1.5% expansion in the previous year,
which was among the slowest in the region.
Growth in the fourth quarter of 2022 is estimated at 2.8% on
the year and 0.2% on the quarter, he said. That would be a
slower pace than the previous quarter as exports weakened.
The government will report official 2022 GDP data on Friday.
Arkhom played down concerns over the impact on the economy
of the strength of the Thai currency , which was
moderate compared with peers.
"The private sector said the baht was too strong, but it's
not very strong," he said. "The baht is strengthening on the
fundamentals of the economy that has started to recover".
The baht has appreciated about 2.2% against the
dollar so far this year, becoming Asia's second-best performing
currency after Indonesia's rupiah.
Arkhom said a transaction tax on share sales, which had been
waived for more than three decades, was still in the process of
becoming law but this was taking longer than originally
expected.
(Reporting by Orathai Sriring and Kitiphong Thaichareon;
Additional reporting by Satawasin Staporncharnchai; Editing by
Ed Davies and David Holmes)
