Rates in Thailand will go up for “a while” to help the economy grow fully, says the central bank.

The central bank of Thailand said on Monday that the country’s key interest rate will keep going up until the economy grows to its full potential and inflation goes back to where it should be.

In a statement for an analysts’ meeting, the Bank of Thailand (BOT) said that tightening money around the world hasn’t had much of an effect on the country’s finances.

The outlook for Thailand’s economy and inflation has been about the same as expected, but the BOT said the central bank is ready to change how quickly it raises rates if the outlook changes.

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Assistant Governor Piti Disyatat told the meeting that the economy should fully recover in the second half of 2023. At that time, inflation should also return to the 1%–3% range that the BOT wants to see.

“So, rate hikes will have to go on for a while,” he said, adding that the rate committee would decide the final rate based on the economy in the second half of 2023.

Since August, when it was at a record low of 0.50%, the BOT has raised its key rate by a total of 75 basis points over three meetings. The next time it will look at policy is on January 25, when economists expect another increase.

Thailand’s tightening cycle has been slower than those of many of its Southeast Asian neighbors. This is because Thailand’s economy has been slower than those of its neighbours, and the important tourism sector has only just started to pick up this year.

The central bank thinks the economy will grow by 3.2% this year, 3.7% in 2023, and 3.9% in 2024. Private consumption and tourism will help the economy grow at these rates.

It said that 10.5 million foreign tourists would come this year, 22 million would come in 2023, and 31.5 million would come in 2024. Last year, there were only 428,000 tourists from outside the country, and before the 2019 pandemic, there were almost 40 million.

Piti said that slowing economic growth around the world shouldn’t have a big effect on the number of foreign tourists because most of them come from Asia, where economies are still doing well.

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Senior director Sakkapop Panyanukul said that the weakening of the baht hasn’t hurt the economy much and that the currency has become more stable.