Thailand: BoT: Policy tightening will not disrupt recovery

  • Thailand’s economy will continue growing in 2022 and 2023, driven by a recovery in domestic demand and tourism, the central bank said on 27 Jun 22.
  • Recovery had been clearer and could be better than expected while there was a greater risk inflation would be higher than projected, Bank of Thailand officials told an analysts’ meeting.
  • Monetary policy should be adjusted in a timely manner to keep inflation expectations anchored, they said.
  • A tightening of monetary policy would not disrupt the recovery of Southeast Asia’s second-largest economy, the meeting was told.
  • The central bank would try to prevent the economy from overheating and triggering demand-driven inflation, by gradually shifting from the current very accommodative policy, assistant governor Piti Disyatat said.
  • The BoT’s task was to help the economy take off smoothly, he said.
  • “It’s a challenge for monetary policy to release the accelerator pedal appropriately and timely so that the recovery has good momentum,” Piti said, referring to the current record low interest rate of 0.5%.
  • The speed of policy tightening would be determined by data and in line with associated risks, he said. The BoT had no intention of springing surprises on markets.
  • The BoT sees inflation of 6.2% in 2022 and 2.5% in 2023 and economic growth of 3.3% in 2022 and 4.2% in 2023.
  • The BoT has no plans to hold a special policy meeting at the moment and the remaining three scheduled meetings for 2022 slated for Aug 22, Sep 22 and Nov 22 were still appropriate, he said.
  • The BoT will next review policy on 10 Aug 22, when most economists expected a rate hike.

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