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MNI STATE OF PLAY: Thai CB Upgrades Growth and Inflation

MNI (Sydney)

Thailand’s central bank said that inflation and growth will both be higher than expected in 2022 as the economy exits pandemic conditions but believes that accommodative monetary policy is still needed to support the recovery, and in particular the labour market.

The Bank of Thailand left its policy rate unchanged on Wednesday, as expected, but the bank’s statement gave a more optimistic outlook for the economy as international tourists start to return, see: MNI STATE OF PLAY: Thai CB Waits For Tourism To Drive Recovery.


While saying that the economy would “expand better than expected”, the BoT did not give an upgraded forecast for growth, which has been for 3.9%. “The economic recovery is still fragile and varies from sector to sector,” the BoT said.

“Especially in the tourism sector, which is still at a lower level than before the outbreak, the Monetary Policy Committee believes that developments in the labour market must be monitored and the impact of the higher cost of living in a situation where income has not fully recovered.”


January headline CPI surprised on the upside at 3.2%, and the bank said it could be above its 2% to 3% target range in the first half of this year driven by energy prices and fresh food.

Demand side inflation pressures, however, remained low and this was a key reason the Monetary Policy Committee left rates on hold.

The BoT noted that the baht remained volatile against the USD, and that with developed market central banks raising rates it would need to monitor global financial markets and encourage SMEs to hedge their exchange rate risk.

MNI Sydney Bureau | +61-405-322-399 |
MNI Sydney Bureau | +61-405-322-399 |

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