Thailand: Recovery intact, tourism rebounding – central bank

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, Bank of Thailand (BoT) governor Sethaput Suthiwartnarueput said on Wednesday.

The BoT would continue to gradually normalise interest rates to help the economy grow at its potential and keep inflation in check, the central bank chief told a media briefing.

Mr Sethaput said exports, despite growing in the second half, will be flat for the year. The country was expected to receive 29 million foreign tourists this year, he added.

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.

On Tuesday, the Tourism and Sports Ministry said in a statement that Thailand received 14.15 million foreign visitors from Jan 1 to July 16, with spending of 588 billion baht (US$17.11 billion), but the number is expected to exceed 15 million by the end of July.