BOT expects continued economic fluctuations, governor say
Bank of Thailand Governor Veerathai Santiprabhob says the BOT will continue to monitor fluctuations in the economic system due to the increasing divergence of monetary policies in the major economies, while fluctuations in global money markets could be mo
"Based on various analyses, there is a chance that [US] interest rates will increase, while the central banks of |other major economies, such as the ECB [European Central Bank] and the Bank of Japan, might have to ease their monetary policies even further. |These factors could create fluctuations in the money markets, and we have to be careful," he told reporters at an economic seminar held by the Thammasat Economics Association yesterday.
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"In terms of the real economy, we can see some recovery, especially in the US economy, which has continued to recover, but the overall outlook of emerging markets is still risky in many aspects. China’s economy is a factor that we have to be cautious about," he said.
Veerathai said the global economy would continue to recover gradually, while Thailand would see more economic momentum from the government’s stimulus measures. Investments on infrastructure mega-projects, if realised, will support the recovery of the Thai economy, as they are expected to become more apparent by the beginning of next year.
"The expansion in the tourism sector might have slowed in the third quarter because of the bombing incident in Bangkok, but this sector still has high potential and will continue to support the economy next year," he said.
"The Thai economy has the prospects to continue to recover, but the recovery is not broad-based. The rural economy will have to watch out for drought, which is still a major risk. Even though agricultural prices might not be dropping like in the previous period, they will continue to be at low levels, and this will continue to affect farmers’ incomes."
Meanwhile, Bangkok Bank executive vice president Kobsak Pootrakool told The Nation he expected gross domestic product to expand by at least 4 per cent next year, while commercial banks have enough liquidity to support the government’s stimulus measures, which involve providing more household, SME and housing loans.
"Commercial banks have more than enough liquidity to support the short-term measures and are ready to provide loans to people who wish to invest. We expect that the government measures will support the economy, while the increases in household, SME and housing loans will provide more liquidity in the economic system," he said.
"What is more important is to encourage private companies that have saved up a lot of money and cash on hand to invest now. Then the Thai economy will definitely move forward."
