SATURDAY, February 24, 2024
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BOT reduces GDP growth estimate slightly in view of export slump

BOT reduces GDP growth estimate slightly in view of export slump

The Bank of Thailand (BOT) is reducing its estimation of GDP growth to 3.5% from 3.6% due to the country’s stagnant export sector and global economic slowdown.

BOT governor Sethaput Suthiwartnarueput was speaking about Thailand’s economic trends on Monday at the bank’s annual seminar titled “Next Step of Thailand’s Economy and Finance”. The forum was held at BOT’s regional office in Chiang Mai.

“We expect to see around 3.5% year-on-year economic expansion this year and next,” he said, adding that the inflation rate for this year will remain within the target of 1-3%.

“Thailand will enjoy a gradual and continuous economic recovery thanks to financial strategies that have been focusing on creating a smooth take-off [for businesses],” he added.

Sethaput also predicted that BOT’s Monetary Policy Committee could either maintain or increase the policy rate during the rest of the year, but it is unlikely that the interest rate will be lowered.

The bank raised the rate on August 2 by 25 basis points to 2.25% in a bid to tame inflation.

“There is no need to raise the policy rate over the neutral rate like some countries have done, as Thailand’s economy and inflation status are different from theirs,” he said.

The neutral rate of interest, previously called the natural rate of interest, is the real interest rate that supports the economy at full employment/maximum output level while keeping inflation constant.

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