Thai Central Bank Prioritizes Stability in Policy Focus and Keeps 2023 GDP Forecast Unchanged
On Monday, Bank of Thailand (BOT) governor Sethaput Suthiwartnarueput announced that the country’s economy is expected to grow by 3.6% in 2022. He also stressed that stability should be prioritized over economic stimulus in both fiscal and monetary policies.
Despite the pandemic and other shocks, Sethaput believes that Thailand’s economy is resilient and can withstand multiple challenges. Last year, the economy grew by 2.6%.
To ensure stability, the BOT raised interest rates by 0.25% to 1.75% last month. However, the central bank has taken a less aggressive approach compared to other regional peers, raising its key rate by a total of 125 basis points since August.
Sethaput also emphasized that the BOT has the necessary tools to support the financial system if any problems arise. While policy normalization will continue, he added that caution will be exercised and the situation will be monitored closely.
With the upcoming elections in May, several political parties have promised various handouts and giveaways, from cash transfers to increasing the minimum wage. However, Sethaput stated that economic stimulus is not necessary at this time and that markets are ready to penalize policies that threaten stability.
Overall, the BOT’s focus on stability and cautious approach to policy normalization reflect its commitment to maintaining a resilient economy despite uncertain circumstances.
