Economy seen growing 3.6% this year – Bank of Thailand

The Thai economy is expected to grow 3.6% this year and 4.0% next year, helped by a recovery in tourism despite inflationary pressures, a member of the Bank of Thailand’s (BoT) Monetary Policy Committee said on Wednesday.

The forecasts compare with the central bank’s official projections in June for growth of 3.3% this year and 4.2% next year.

The BoT earlier said growth this year could beat its forecast due to better-than-expected tourism. It is due to review its forecasts at the next rate meeting on Sept 28.

Despite headline inflation hovering around 14-year highs of 7.61% in July, far above the central bank’s target range of 1% to 3%, Kanit Sangsubhan said it was not that high and would fall back next year as oil prices drop.

He expected headline inflation at 6.3% this year and 2.6% next year, compared with the 6.2% and 2.5% forecast by the central bank in June, respectively. “Don’t panic. Inflation in Thailand is not high compared with other countries,” he told a business seminar.

Last week, the BoT raised its key interest rate for the first time in nearly four years, by 25 basis points to 0.75%, to curb inflation and signalled further gradual hikes.