[BANGKOK] Thailand needs to lift its long-term growth, and the policy interest rate of 2 per cent is robust for current circumstances, Bank of Thailand (BOT) governor Sethaput Suthiwartnarueput said in a speech delivered earlier this week and released on Friday (Mar 14).
“We consider growth, inflation and financial stability when deciding rates,” he said in the speech to the Japanese Chamber of Commerce, a transcript of which was published on Friday.
The central bank made a surprise cut to rates last month from 2.25 to 2 per cent.
“We believe 2 per cent is a good, robust rate suitable for a wide range of outcomes, and we don’t plan to move rates frequently,” he noted, adding that BOT sees economic growth this year slightly above 2.5 per cent.
“We share the sentiment that a 2.5 per cent growth rate isn’t satisfactory,” Sethaput added. “We need long-term solutions, not just short-term economic boosts.”
The government has a growth target of 3 per cent this year, and has said it is aiming to do better than that through stimulus measures worth US$4.4 billion and other steps to boost activity.
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Exports, a key driver of the economy, are expected to grow at a slower rate than last year’s 5.8 per cent, Sethaput said.
Growth in South-east Asia’s second-largest economy would also be supported by consumption, which was seen growing at slightly above 2.5 per cent, and an increase in foreign tourist arrivals to 39.5 million, not far from pre-pandemic highs, he pointed out.
Inflation was expected to be 1.1 per cent this year, the governor noted, adding that inflation being at the lower end of the central bank’s target range of 1 to 3 per cent was not a concern.
The next rate review is on Apr 30. REUTERS
