Thai PM says central bank rate hikes no good for economy

Thailand’s central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo

BANGKOK  – Thai Prime Minister Srettha Thavisin said the central bank’s rate increases have not been good at all for the economy, urging it to avoid moves that will adversely impact low-income families and small businesses.

The government of Srettha, a real estate tycoon who took office in August, is seeking to spur growth in Southeast Asia’s second biggest economy though stimulus and consumer spending, with Thailand trailing regional peers with growth forecast at about 2.4 percent last year, short of the 2022 figure.

“The Bank of Thailand has raised interest rates despite of negative inflation for many consecutive months is not good for the economy at all and also has an impact on people with low incomes and SMEs,” he said on X social media late on Sunday.

READ: Thai central bank holds key rate at 2.5%, cuts growth outlook

The central bank left its policy rate unchanged at 2.5 percent in November after raising it by 200 basis points since August last year to curb inflation. It will next review policy on Feb. 7.

READ: Thai inflation lowest in 33 months – commerce ministry

Headline inflation came in at -0.83 percent in December, making it the eighth straight month that it was outside the central bank’s target of 1 percent to 3 percent.

Srettha said he hoped the central bank would “help take care of the people by not raising rates in the opposite direction of inflation.