The Ministry of Finance has confirmed that the Thai economy is on a solid path to recovery and showing resilience, helped by sound revenue collection and normalization of its tourism sector, while inflation should come in below 3% this year.
Southeast Asia’s second-largest economy expanded faster than expected in the first quarter of this year due to a revival in its vital tourism sector.
Finance Minister Arkhom Termpittayapaisith told a World Bank forum that the economic recovery has been supported by a comprehensive and timely policy mix of fiscal and monetary policies, which respectively should continue to be implemented proactively and prudently.
While predicting that inflation would come in below 3% this year, inside the Bank of Thailand’s (BOT) target range of 1% to 3%, Minister Arkhom said he could not tell whether there would be a reduced need for raising interest rates.
On the sidelines of the forum, he told reporters: “There is still uncertainty over energy prices and U.S. issues.” According to a Reuters poll, the BOT is expected to raise its key rate again by a quarter point to 2.0% on Wednesday (31 May) before holding it steady through 2024.
On Monday (29 May), the ministry said in a statement that the economy in April was supported by stronger tourism, higher farm production, and falling inflation, while Thailand was well-positioned to withstand global volatility.
Minister Arkhom said revenue collection also showed strong signs of recovery in the 2022 fiscal year and was expected to surpass the pre-pandemic level in the 2023 fiscal year.
The World Bank in a statement on Monday said Thailand now needed to address growing spending needs while keeping public debt under control. It added that Thailand’s public debt rose due to the pandemic response, but overall fiscal risks remain manageable. (NNT)
