Bangkok, Aug. 8 – The Governor of the Bank of Thailand emphasizes that the Thai economy will continue to recover this year. But GDP may be lower than expected at 3.6%, changing the monetary policy question from 'Smooth take off' to 'Landing', warning the new government's policies must not affect stability.
at the Bank of Thailand Academic Seminar northern office “Elevate the Northern Economy Seize opportunities in a challenging world.” Dr. Sethaput Suthiwart-Narueput The Governor of the Bank of Thailand (BOT) revealed during a conversation with the Governor of the Bank of Thailand on the topic 'The next step in the Thai financial economy' stating that the overall Thai economy continues to grow continuously. Although some periods will see some economic numbers coming out lower than expected, the economic growth figure (GDP) will be in the middle 3 this year and next year. Lower than expected at 3.6% while estimating that the GDP figure for the 2nd quarter of 2023 at the Office of the National Economic and Social Development Council will be announced in Aug. This trend is lower than expected. Partly because the Thai economy is driven by private consumption. including tourism which has not yet seen a significant change in the prank As for private investment, growth is expected to exceed 4%, which is considered a relatively high level. tourism section Although China may not come as quickly as we think. But it is also believed to see a figure of 29 million tourists, which will help support the economic recovery. Exports are not doing well due to the global economy and the Chinese economy. but believes that the second half of the year will be better
Mr. Sethaput also discussed the direction of monetary policy of BOT in the next phase that the context This year's economy is different from 2022, when inflation rose high and fast. Until causing the Monetary Policy Committee (MPC) to start raising interest rates to take care of inflation While this year, the Thai economy has returned to grow at a higher level than before the COVID-19 pandemic. It is expected that long-term inflation will gradually return to the target range of 1-3%. Therefore, the question of monetary policy has to change as well. Now we will focus on Landing, namely how to make the landing go down well. Previously focusing on Smooth take off, in addition to looking at short-term factors such as inflation and how the economy is growing Must look at the long-term economy as well, with 3 things to consider: 1. Is economic growth in the long-term potential or not, ie 3-4% if it grows faster than that? There will be a problem with heat. because our economy is an aging society Not growing as fast as before 2. Inflation is within the target range of 1-3%, which is a sustainable level, and 3. Interest rates must not cause structural or balance problems. that happened to the economic system Especially the problem of household debt that is as high as 90% of GDP, partly due to the fact that we have very low interest rates for too long. Therefore, interest and real interest must be adjusted back to be more in line with the long-term balance.
As the monetary policy question shifts from smooth take off to landing, we remove 'gradual interest rate hike' and add the words 'optionality' is either this or that. So the meeting The MPC next time has a chance to maintain or raise interest rates. But definitely not down, along with stating that the BOT understands that raising interest rates will have side effects and create a burden, but it is necessary. because it has an overall effect In the past, measures have been issued to help take care of vulnerable groups. that may be particularly affected by rising interest rates, such as long-term debt restructuring measures and sustainable household debt relief measures transmission of commercial banks After the interest rate increase, the BOT does not want to affect the customers of commercial banks too much, for example, the latest increase of 0.25%, the pass to the MRR rate is only about 50%.
Regarding the political uncertainty in politics, the BOT governor views that the impact is not much, which the BOT expects the economy to grow at a level of 3% or more, including the factors of budget delays. entered one level It is expected that the budget will be delayed by 2 quarters and that the regular expenditure budget can still operate normally. Just the investment budget may affect some, but not so much that it will significantly change the overall economic outlook this year. However, the real risk point, apart from what the new government will look like There is still a policy to see that the new government. What will be the policy?
“What is worrying about the risk is not knowing who will come. How is the government? If it comes, I don't want to see the new government's policies that undermine stability. I understand the government and politics. must have a populist spending style But if it's within the range, not too much, and there's a clear source of money, it's okay, but if it's too much to the point of affecting stability This is worrisome, ”said Mr Sethaput.-Thai News Agency
Source: Thai News Agency