The Bank of Thailand (BOT) reported optimistic numbers for the Thai economy in May, indicating signs of economic growth despite a sharp increase in inflation.
According to BOT senior director Chayawadee Chai-Anant, private consumption in May after seasonal adjustment rose by 0.6% from the previous month in most spending categories. This reflects the decreasing public concerns regarding the Covid-19 infections which resulted in improvements in economic activities.
External demand has also performed well due to the gradual recovery in the export and tourism sectors. After seasonal adjustment, the value of merchandise exports excluding gold increased 3.5 percent from the previous month in most categories, reflecting higher demand from trading partners. Meanwhile, the number of foreign tourist arrivals increased to 521,400 in May, up from 293,400 in April. Foreign visitors totaled 1.31 million in the first five months of this year.
Moreover, the service production index excluding gold increased by 2.5 percent month on month in May, rising by 20.9 percent year on year.
Despite these encouraging figures, consumer confidence remains low due to concerns about increasing expenses. The country’s headline inflation rate increased to 7.1 percent in May from 4.65 percent in April, owing to higher electricity and domestic retail oil prices, as well as rising food prices and a low base effect for water bills last year.
The senior director added that the central bank will maintain its outlook that inflation will peak in the third quarter, owing primarily to higher energy and food prices. (NNT)
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