BANGKOK- Thailand’s economy improved in October due to tourism, exports and private consumption, which was helped by government stimulus measures, the central bank said on Friday as it reiterated last month’s rate cut was not the start of an easing cycle.
Southeast Asia’s second-largest economy has picked up pace this year having lagged regional peers after the pandemic, but the government and central bank have differed over what needs to be done to sustainably lift potential growth.
Exports, a key driver of the economy, rose 14.2 percent in October from a year earlier, while imports rose 17.1 percent, resulting in a trade surplus of $1.4 billion, the Bank of Thailand (BOT) said.
As such, industrial production increased in line with domestic demand and exports, excluding automobiles, it said.
Private consumption increased 0.8 percent in October from September and private investment rose 4.5 percent, the central bank said, adding that government spending also rose sharply.
Tourism, another key economic driver, helped the service sectors. However, structural impediments pressured business and household income in some groups, the BOT said.
The current account surplus was $0.7 billion in October, up from September’s surplus of $0.6 billion, it said.
The BOT unexpectedly cut its policy interest rate by 25 basis points to 2.25 percent at its Oct. 16 review. It will next review monetary policy on Dec. 18.
Assistant Governor Chayawadee Chai-Anant said the rate cut was not the start of an easing cycle, after the International Monetary Fund had said a further reduction would be beneficial.
“We agreed that it was an adjustment to a neutral or normal state, not an easing cycle,” she told a news conference, adding the neutral rate was a range rather than a specific level and there could be some differences in perspective.
“We have to wait for the MPC (monetary policy committee) to consider it. It is data and outlook dependent, so we need to reassess it.”
The economy grew an annual 3 percent in the July-September quarter, the fastest pace in two years, but officials and analysts saw increased challenges to maintaining the momentum next year. At last month’s review, the BOT raised its 2024 GDP growth forecast to 2.7 percent from 2.6 percent but trimmed its 2025 growth outlook to 2.9 percent from 3.0 percent.
