BANGKOK- Thailand’s exports may be weaker than expected but the overall economic recovery was intact, the central bank governor said on Wednesday.
Inflation was lower than expected and would return to a target range of 1 percent to 3 percent , Bank of Thailand Governor Sethaput Suthiwartnarueput told a central bank seminar, adding there was increasing uncertainty over global issues and domestic politics.
The current policy rate was near a balanced level, he said.
“The economy as a whole was recovering on consumption and tourism,” Sethaput said.
Thailand has been under a caretaker government for five months as deadlock prolongs after the election-winning Move Forward party’s failure to form a government.
Minutes from the monetary policy meeting on Aug. 2 said that policy rates were approaching stability levels.
Public consumption and investment were expected to decline from a year ago due to a delay in the budgeting process, the minutes said, but should recover in 2024, the minutes showed.
On Aug. 2, the Bank of Thailand’s policy committee voted unanimously to increase the one-day repurchase rate by a quarter point to 2.25 percent , citing lingering inflation risks.
Thai exports shrank for a ninth consecutive month in June, albeit at a smaller rate than expected, as global demand remains sluggish, but the commerce ministry said it still expects some growth for the full year.
Customs-based exports, a key driver of Thailand’s economy, dropped 6.4 percent in June from the same month a year earlier, beating analysts’ average estimated decline of 7.3 percent in a Reuters poll. Exports rose 2 percent from May.
“The economic situation of trading partners remained subdued due to pressure from high inflation rates and elevated interest rates, which led to restrained production and consumption,” the ministry said in a statement.
Thailand’s export decline, however, has been less than that of other exporting countries, Keerati Rushchano, the ministry’s permanent secretary, told a press briefing.
The ministry is targeting annual export growth of 1 percent for 2023, he said. Its earlier target was for a 1 percent to 2 percent export rise.
“We’ll try every way to make export figures meet the target, although it’s difficult,” he said.
