On February 13, 2023, in Bangkok, Thailand, Arkhom Termpittayapaisith, the finance minister of Thailand, chats with Reuters.
SINGAPORE –
According to the country’s finance minister, the rate of monetary tightening to combat inflationary pressures is still “appropriate” and Thailand’s economy may expand more quickly than expected this year as a result of a burgeoning tourism industry.
Rather than mimicking the fast rate of tightening by the U.S. Federal Reserve, the Bank of Thailand has been aligning policy with the requirements of the domestic economy, according to Arkhom Termpittayapaisith in an interview with Reuters.
In contrast to the Fed, our central bank has adjusted interest rates in a way that is rational and commensurate with our economy, according to Arkhom.
He said that monetary policy must assure the economy would completely recover, stating that “raising rates too much will significantly drag down the economy that is getting stronger.”
However, given that Thailand’s economic recovery has lagged behind that of other Southeast Asian nations and that the tourist industry has only just begun to revive, its tightening cycle has been less pronounced than that of many regional rivals.
According to Arkhom, a resurgence in tourism may allow Thailand’s gross domestic product to increase faster than the projected 3.8% this year.
There is a possibility that visitor numbers would surpass our prediction of 27.5 million this year, according to Arkhom, who noted that tourism is “playing a crucial role in sustaining the economy.”
With the return of Chinese tourists, at least 7.5 million of whom are anticipated to arrive this year following China’s reopening, he predicted that tourism will go up this year.
With 11.15 million international visitors in 2022, Thailand exceeded its tourism goal, although it was still far from the pre-pandemic 2019 peak of around 40 million.
He anticipates the second-largest economy in Southeast Asia to expand by roughly 3% in 2022, following a 1.5% growth in 2017, which was among the region’s slower growth rates.
According to him, growth will be 2.8% year over year and 0.2% quarter over quarter in the fourth quarter of 2022.
Arkhom downplayed worries about the Thai currency’s rise, which was mild in comparison to peers, and its effects on the economy.
The baht is not really strong, despite what the private sector said.
The baht has gained roughly 2.2% versus the dollar so far this year, overtaking the Indonesian rupiah to become Asia’s second-best performing currency.
A transaction tax on share sales, which has been exempt from law for more than three decades, is still being implemented, according to Arkhom, albeit it is taking longer than anticipated.