Thai recovery intact, interest rates to normalise gradually – central bank chief

BANGKOK (Reuters) – Thailand’s economic recovery is intact, with growth of 2.9% likely in the first half of this year and 4.2% in the second half, the central bank chief said on Wednesday.

The central bank would continue to gradually normalise interest rates to help the economy grow at its potential and keep inflation in check, Bank of Thailand Governor Sethaput Suthiwartnarueput told a media briefing.

Thailand was expected to receive 29 million foreign tourists this year, he added, but exports, a key driver of growth, would be flat for the year, despite growing in the second half.

Despite falling inflation, the central bank is expected to raise rates further at its next meeting on Aug 2, as the economy continues to recover.

Thailand’s annual headline inflation rate dropped to its slowest pace in 22 months of 0.23%, well below the central bank’s target range of 1% to 3%. The core rate stood at 1.32% in June.

The BOT has raised its key rate by a total of 150 basis points since August to 2% to curb inflation. It earlier said core inflation remained elevated.

In May, the central bank maintained its forecasts for economic growth at 3.6% this year and 3.8% next year. The economy expanded 2.6% in 2022.

Southeast Asia’s second-largest economy expanded by a more-than-expected 2.7% in the first quarter from a year earlier as the vital tourism sector gathered strength.

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