Policy tightening to be gradual as recovery slow, says Bank of Thailand

Economic recovery in Thailand remains intact but slow, so monetary policy tightening should be gradual to ensure a smooth recovery while fighting surging inflation, Bank of Thailand (BoT) governor Sethaput Suthiwartnarueput said on Saturday.

Southeast Asia’s second-largest economy is expected to return to its pre-coronavirus pandemic growth rates late this year or early next, Mr Sethaput told reporters.

BoT senior director Chayawadee Chai-Anant said on Friday that the central bank believes politics should not affect the economy.

For domestic political risks, the BoT is concentrating on fiscal budget disbursement, which is continuing, said Ms Chayawadee.

Functioning fiscal and monetary policies have supported the economic rebound, while foreign investors are confident in the country’s strong fundamentals, reflected by positive capital inflow, she said.

The bank reported economic data for August on Friday signalling continued recovery driven by private consumption and foreign tourism arrivals.