Thai central bank sees 2023 GDP growth, inflation lower than expected

BANGKOK  -Thailand’s central bank chief said on Tuesday that this year’s economic growth and inflation were expected to be lower than previously forecast.

Last month, Bank of Thailand Governor Sethaput Suthiwartnarueput had said 2023 growth could come below the central bank’s 3.6 percent forecast and a revised figure would be published in September. Last year’s growth was 2.6 percent .

READ: Thai growth forecasts may need to be revised down – central bank chief

Inflation would gradually return to within target range, he said. A Reuters poll expects a rise of 0.61 percent for August. Data is due out later on Tuesday.

The current policy interest rate was close to a neutral level, Sethaput said. On Aug. 2, the central bank raised its key interest rate for a seventh straight meeting to 2.25 percent . It will next review monetary policy on Sept. 27.

READ: Thai central bank to hike more as rate not neutral yet, says core inflation high

“A neutral rate means it helps inflation stay in a sustainable range, and GDP grow at its potential of 3-4 percent without creating financial imbalances,” he said.

The BOT has hiked the key rate by 175 basis points since August last year to curb price pressures.

Overall, the Southeast Asian country’s economic recovery remains intact, Sethaput said, adding that 29 million foreign arrivals are still expected throughout the year.

Tourism remains a key driver, accounting for about 12 percent of GDP before the pandemic.

Speaking virtually at a Fitch economic seminar, he said second-quarter GDP was  disappointing.

Thailand’s economy grew 1.8 percent in the April-June period on the year and 0.2percent on the quarter, sharply slowing from the previous quarter’s 2.6 percent and 1.7 percent , respectively, as exports slumped.