BANGKOK – Thailand’s economy could grow faster than forecast this year as a revival in tourism quickens, while the pace of monetary tightening to stave off inflationary pressures remained “reasonable”, the country’s finance minister said on Monday.
In an interview with Reuters, Arkhom Termpittayapaisith said the Bank of Thailand had been aligning policy with the needs of the domestic economy rather than mirroring the aggressive pace of tightening by the US Federal Reserve.
“Our central bank’s interest rate adjustments have been reasonable, not following the Fed but consistent with our economy,” said Arkhom.
“Raising rates too much will sharply drag down the economy that is getting better,” he said, adding monetary policy must ensure the economy would fully recover.
The Bank of Thailand has raised the key rate by a total of 100 basis points since August to 1.50 percent. But its tightening cycle has been less aggressive than many regional peers, as Thailand’s economic recovery has lagged other Southeast Asian countries as the tourism sector only started to rebound last year.
It will next review policy on March 29, when most economists see a further hike.
Arkhom said Thai gross domestic product may beat a forecast of 3.8 percent growth this year on a rebound in tourism.
“Tourism is playing a key role in supporting the economy … there is a chance that tourist numbers will beat our forecast of 27.5 million this year,” Arkhom said. — Reuters
