Thai rate hikes to be gradual, inflation to stay high through 2022 -central bank minutes

BANGKOK – Thailand’s rate committee raised its key interest rate late last month and noted that headline inflation was set to remain high through 2022, minutes of the meeting showed on Wednesday.

Policy normalization should be done in a gradual and measured manner consistent with the outlook for growth and inflation, the minutes said.

On Sept. 28, the committee unanimously voted to raise its key interest rate for a second straight meeting, by 25 basis points to 1 percent, to contain inflation. It will next review policy on Nov. 30, when economists expected a further hike.

Headline inflation would remain at a high level through 2022 and the outlook would still be subject to upside risks, the minutes said.

However, the committee had confidence that the economic recovery would continue to gain traction on improving foreign tourist figures while a global economic slowdown would have a limited impact on the Thai economy, the minutes said.

The committee felt that potential labour shortage could affect the economic recovery and create upward pressures on wages in some business sectors, the minutes said.