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Saturday, December 3, 2022

Economic Outlook Still Positive Despite Planning Agency Downgrade

The Ministry of Finance has indicated that Thailand’s economic outlook for 2022 remains positive despite the state planning agency recently downgrading its growth forecast. 

During a recent interview with reporters, Finance Minister Arkhom Termpittayapaisith said that the Thai baht, which recently traded at its weakest level against the dollar in nearly five years, supports various Thai export products. 

He added that he hopes the Bank of Thailand (BOT) will implement a policy rate that supports recovery.

The finance ministry lowered its growth forecast for 2022 from 3.5-4.5% to 2.5-3.5% and increased its inflation forecast due to higher prices and slower global growth caused by Russia’s invasion of Ukraine.

According to Arkhon, the revised outlook “remains a positive indicator that the economy is still recovering.” Given the U.S. Federal Reserve’s policy tightening, he suggested that Thailand’s current monetary policy should continue to support the economy. 

Since May 2020, the BOT has maintained its key rate at a record-low 0.50%. As inflation has already surpassed the upper limit of the BOT’s target range of 1-3%, some economists anticipate a rate hike later this year as opposed to the following year.

The BOT will conduct its next policy review on June 8.

Claodia Moro
Author: Claodia Moro

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