Thailand's central bank on Wednesday raised its economic growth forecast for this year to 3.8% from 3.5%, upgraded its estimate for exports, and maintained its one-day repurchase rate at 1.5%.
The Bank of Thailand (BoT) expects exports - a key growth driver - to rise 8.0% this year from a 5.0% increase projected in July.
The BoT now predicts headline inflation at 0.6% this year, compared with 0.8% seen earlier, and against its target range of 1-4%.
The state planning agency, the National Economic and Social Development Board, in August upgraded its 2017 economic growth to 3.5-4.0% from 3.3-3.8%, with exports seen increasing 5.7%.
Last year, Southeast Asia's second-largest economy grew 3.2%.
The central bank held its benchmark interest rate near a record low, spurning the government’s call for policy easing to help bolster the economy.
The one-day bond repurchase rate was left at 1.5%, with monetary policy committee members voting unanimously in favour, the bank said.
Thailand’s Finance Ministry has been stepping up pressure on the central bank to cut interest rates as the currency surges and as inflation remains subdued. The International Monetary Fund supports the argument for easing, saying it will help steer low inflation back to the target range.
Thailand’s economic growth is lagging peers in Southeast Asia and the export-reliant nation is at risk from the baht which has gained more than 7% against the dollar this year -- the strongest performance in Asia.
The Bank of Thailand is holding its ground and has argued that a rate cut may increase financial stability risks. The central bank has instead intervened in the currency market and curbed the supply of short-term bonds to restrain the baht.
Inflation was 0.3% in August, below the central bank’s target band of 1% to 4%. While household debt has fallen this year, it is still close to 80% of gross domestic product.