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Thailand: Central bank says politics won’t affect economy
The Bank of Thailand believes politics should not affect the economy, which is showing signs of further recovery in the second half.
For domestic political risks, the central bank is concentrating on fiscal budget disbursement, which is continuing.
Functioning fiscal and monetary policies have supported the economic rebound, said the central bank’s senior director Chayawadee Chai-Anant.
Foreign investors are confident in the country’s strong fundamentals, reflected by positive capital inflow.
Given the clearer signs of an economic recovery, the central bank expects the positive momentum to continue in the second half.
The bank reported economic data for August on Friday signalling continued recovery driven by private consumption and foreign tourism arrivals, said Ms Chayawadee.
Private consumption indicators after seasonal adjustment remained similar to the previous month thanks to increased spending in most categories, except non-durable goods.
Several fundamental factors supporting household consumption gradually improved, especially employment and consumer confidence. However, elevated living costs still weighed down consumption, said the central bank.
Meanwhile, private investment indicators after seasonal adjustment improved from the previous month. Investment in machinery and equipment increased from the import of capital and higher registration of commercial vehicles.
Investment in construction gradually improved, as reflected by increases in construction materials and permitted areas for construction, especially for dwelling and manufacturing purposes.
Ms Chayawadee said the number of foreign tourist arrivals after seasonal adjustment rose slightly from the previous month thanks to the continued relaxation of international travel restrictions. During January to August, foreign tourist arrivals tallied 4.37 million, she said.
Headline inflation rose to 7.86% in August, up slightly from the previous month mainly because of fresh food inflation, which was driven by higher vegetable and fruit prices, said Ms Chayawadee.
In addition, core inflation increased to 3.15% in August, stemming from both food and non-food items. Energy inflation slowed in tandem with global crude oil prices.
Regarding the exchange rate, the baht appreciated against the US dollar in August as markets expected a looser monetary policy stance from the US Federal Reserve and improved recovery prospects for the Thai tourism sector, said the bank.
However, the baht has been weakening since Sept 26 because of a stronger dollar as the Fed and other central banks pursue hawkish policy rate hikes, leading to higher volatility of money markets worldwide.
Source: https://www.bangkokpost.com/business/2404698/central-bank-says-politics-wont-affect-economy