Bangkok, March 29 – SCB EIC raised GDP for 2023 to 3.9%, expecting the Thai policy interest rate to continue to rise to 2% in mid-2023 after the MPC raised interest rates by 0.25% as expected.
After the Monetary Policy Committee (MPC) meeting unanimously resolved to raise the policy rate by 0.25% per year from 1.5% to 1.75% per year, as the Thai economy tends to expand continuously from the tourism and consumption sectors. private sector is important and assess that the overall financial system is stable The problems with financial institutions in major economies during the past period did not have a significant effect on the Thai financial system. As for the baht, the movement was volatile. According to the direction of monetary policy of the US Federal Reserve with uncertainty and the global financial market which has become more volatile due to the problems of financial institutions in major economies.
SCB EIC estimates that the Thai economy in 2023 is likely to expand better than previously assessed. from the support of the tourism sector and private consumption according to the Chinese economic recovery that is faster and stronger than expected By revising up the Thai economy forecast this year to 3.9% from 3.4% previously and raising the forecast of foreign tourists in 2023 from 28 million to 30 million, which will help support the labor market and consumption to continue to recover. In addition, it was found that domestic demand improved. Business and consumer confidence rose The labor market is recovering with multi-dimensional indicators getting closer to the level before the COVID-19 crisis And although vulnerabilities in the labor market still exist but tends to decline in line with economic recovery and employment in the tourism sector.
Thai inflation in 2023 is likely to slow down It is expected to decrease to 2.4%, with the latest assessment of Thailand’s neutral rate at 2.5% and is expected to return to the BOT’s target range of 1-3% this year. Monetary policy may be adjusted back to normal levels that are suitable for the long-term growth of the Thai economy. by evaluating 2 approaches, namely
The MPC will raise the policy interest rate to 2% in May 2023 and maintain it throughout the year. to assess the situation in the second half of the year The global economy may expand at a slower pace due to downside risks such as the lag effect of global monetary policy and the uncertainty of financial institutions’ liquidity problems in some major countries. Including to make the recovery of the Thai economy more thorough. amid tight financial conditions Reflected by the recovery of income in the business sector and vulnerable groups of households. before deciding to raise the policy interest rate to a terminal rate of 2.5% in the first half of 2024.
If the Thai economy continues to grow well in the second half of this year and inflationary pressure from demand following the economic recovery. The MPC is likely to continue to raise interest rates by 25 BPS each time to a terminal rate of 2.5% in the third quarter of this year and maintain it. so that the policy interest mechanism will continue to be passed on to the economic system. – Thai News Agency
Source: Thai News Agency