The Bank of Thailand has revised its growth projection for 2023 downward due to lower-than-expected GDP growth and inflation rates. While private consumption and the tourism sector are expected to be the main drivers of economic expansion in the second half of the year, concerns remain regarding export growth and private investment.
To support a gentle economic landing, the central bank intends to relax its monetary policy, as the current policy interest rate is approaching the neutral level. The subdued growth is primarily attributed to external factors, and the central bank plans to reevaluate its economic assessment. The regulator’s forecast for economic growth this year stands at 3.6%, with inflation expected to remain within the target range of 1-3%.
During the second quarter, private consumption exhibited robust growth, driven by rising incomes and a rebound in tourism. Nevertheless, both exports and tourism spending fell short of projections. Looking ahead, the central bank anticipates economic expansion in the latter half of the year, propelled by continued private consumption and the recovery of the tourism sector.
The central bank’s Monetary Policy Committee is scheduled to convene on September 27 to reassess its monetary policy stance.
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