The Monetary Policy Committee in Thailand has decided to keep the policy rate at 2.50 percent. They considered the current economic recovery and its impact on inflation and financial stability. The Thai economy is expected to see more balanced growth in the upcoming years.
This growth will be driven by domestic demand, the tourism sector, and a recovery in merchandise exports. Inflation is projected to increase next year, aligning with the economic recovery and supply pressures. However, it is expected to remain within the target range.
Despite a slowdown in merchandise exports, the Thai economy continues to recover. It is supported by domestic demand, the tourism sector, and an improvement in exports. Inflation is expected to rise next year due to economic recovery and supply pressure.
Headline inflation is expected to stay within the target range: The overall financial system remains resilient, but there is a need to monitor credit quality for certain sectors. Financial conditions have tightened slightly, but this is not hindering the economic recovery. The Committee expects the Thai economy to gradually recover, with inflation remaining within the target range.
The Committee predicts growth of 2.4 percent in 2023 and 3.2 percent in 2024: The Committee projects a growth rate of 2.4 percent in 2023 and 3.2 percent in 2024. However, considering the government’s digital wallet scheme, the growth projection for 2024 is revised to 3.8 percent, down from the previous assessment of 4.4 percent.
The overall trajectory of the economy suggests a steady recovery, driven by a strong expansion in private consumption, particularly in the services sector, as well as improvements in employment and labor income. Merchandise exports and tourism have been slower than expected: However, the recovery of merchandise exports and tourism has been slower than anticipated.
This is mainly due to sluggish growth in China and a delayed rebound in global electronic demand. Looking ahead, as tourism continues to recover and merchandise exports begin to expand, growth is expected to become more balanced. However, it is important to note that certain structural obstacles may limit the positive impact of the global demand recovery on Thai exports.
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