During the recent “Meet the Press” event, the Governor of the Bank of Thailand (BOT) addressed economic misunderstandings and concerns over high interest rates, affirming the appropriateness of the current rates and the BOT’s readiness to adjust if significant factors arise.
Sethaput Suthiwartnarueput stated that while the Thai economy continues to grow and gradually returns to its potential, the expected growth for 2023-2024 is projected at 3%. This is a decrease from the pre-COVID growth rate of 3.0-3.5%, indicating a modest recovery, particularly affecting employees and freelancers whose incomes lag behind rising expenses and living costs.
Sethaput emphasized that sustaining a 3% GDP growth rate requires significant improvements in labor capabilities and robust infrastructure development. Regarding the current high interest rates, he affirmed they are appropriate for the economic conditions and indicated a readiness to adjust the policy rate if future significant factors arise.
He clarified that any interest rate adjustments would consider comprehensive aspects such as economic growth, financial stability, monetary measures, and household debt. Interest rates must balance the needs of debtors, depositors, importers, and exporters, necessitating complementary measures to minimize adverse effects. These measures include Loan-to-Value (LTV) regulations, financial stability initiatives, exchange rate management, and responsible lending practices.
Sethaput also highlighted the BOT’s efforts to expedite financial institutions in assisting debtors. Since implementing responsible lending measures at the start of 2024, 820,000 accounts have benefited, amounting to 230 billion baht in assistance. The accuracy and clarity of loan advertisements have significantly improved from 3% in January to 63% in June.
Looking ahead, the Thai economy grew by 1.5% in the first quarter of 2024 and is expected to expand by 2% in the second quarter. Projections for the third and fourth quarters are 3% and 4%, respectively, leading to an overall annual growth rate of 3%, aligning with Thailand’s economic potential. (NNT)
