Bank of Thailand raises growth forecasts following tourism boom

It said the number of foreign tourists could hit 29 million this year and 35.5 million next year.

The rising number of tourists, which exceeds previous targets, as well as the policies of the next government could lead to greater economic growth, said Sakkapop Panyanukul, director of the economic and policy department of BOT.

A recovery in the labour market and increased consumer confidence and consumption, Sakkapop said.

He cautioned, however, that there was still a chance that the global economic downturn and political unrest would affect Thailand.

Thai exports could fall by 0.1% this year due to a slowing global economy, but exports are expected to increase by 3.6% by 2024, he said.

Surach Tanboon, director of the monetary policy department at the BOT, said headline inflation was likely to fall and remain at 2.5% due to lower electricity and oil prices.

Surach said that core inflation remains at 2%.

If the price of crude oil rises by 10 US dollars per barrel, headline inflation could be 0.5% more than anticipated, he said.

He added that it is vital to pay attention to the policies of the incoming government since they could put pressure on both the supply and demand sides, exemplifying the case of the 450-baht daily wage hike policy.

Piti Disyatat, executive director of the BOT’s Puey Ungphakorn Institute for Economic Research, said that BOT will host a Monetary Policy Committee meeting in August to discuss how to strike a balance between inflation, economic growth, and financial stability.

It will gather more data and information ahead of the meeting before deciding whether to adjust its policy interest rate, Piti said.

The government budget is at risk of being postponed by a quarter if there is a delay in the formation of the next government, he said.