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Headline inflation seen back within target in H2
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Exports seen up 1%, but may contract
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Rate normalisation measured, ready to adjust
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Economists see further rate hike at March meeting
(Adds Jan economic data, official's comment)
By Orathai Sriring and Kitiphong Thaichareon
BANGKOK, Feb 28 (Reuters) - Thailand's economy is seen
growing between 3%-4% this year as it follows a sustained
recovery path despite a global slowdown, with tourism and
private consumption key drivers, the central bank said on
Tuesday.
Headline inflation, above target at 5.02% in January, should return to within the targeted 1%-3% in the second half of 2023, the Bank of Thailand said, citing a speech on Monday by its governor, Sethaput Suthiwartnarueput. "Supply-side (inflationary) pressures have gradually eased but demand-side pressures could increase due to a fast recovery in the tourism sector," the BOT said in a statement.
The BOT would continue monetary policy normalisation in a
measured way but was ready to adjust as appropriate, it said,
adding Thailand's financial system was stable and its external
position strong.
The BOT will next review policy on March 29, when economists
expect a further rate hike. The BOT also said this month the
tightening cycle was not over yet.
The BOT has raised the key interest rate by a total of 100
basis points since August to 1.50%, a pace less aggressive than
many of its regional peers, with Thailand's economic recovery
lagging much of Southeast Asia.
In November, the BOT predicted economic growth of 3.7% this
year. It will offer a new projection next month.
Southeast Asia's second-largest economy grew 2.6% in 2022,
less than expected but is now gathering steam as tourism
rebounds, helped by the return of Chinese visitors. The BOT
expects 25.5 million foreign arrivals this year, compared with
nearly 40 million in pre-pandemic 2019.
Exports, another key driver of growth, however, were seen
rising just 1% this year, with a possible contraction ahead, the
BOT said, blaming the global economic slowdown.
In January, the economy improved from December, helped by
improved service sector activities and government stimulus
measures, the BOT said in a separate statement.
But exports fell 3.4% in January from a year earlier and
could see another year-on-year drop in February, Assistant
Governor Chayawadee Chai-Anant told a news conference on
Tuesday.
Weakness or strength in the baht has had a little
impact on shipments, but the BOT will ensure the currency is not
too volatile to hurt the economy, she added.
Thailand posted a current account deficit of $2 billion in
January, with a trade deficit at $2.7 billion as imports rose in
the month, the BOT said.
(Reporting by Orathai Sriring, Kitiphong Thaichareon and
Satawasin Staporncharnchai
Editing by Kanupriya Kapoor, Ed Davies, Martin Petty)
