BoT governor: Economic recovery slow, financial position strong

BoT governor: Economic recovery slow, financial position strong

A vendor closes a fruit shop early at the Siam Square shopping district on April 29, 2021. (Bloomberg photo)
A vendor closes a fruit shop early at the Siam Square shopping district on April 29, 2021. (Bloomberg photo)

Economic recovery will be slow and uneven but fiscal and financial positions are strong, Bank of Thailand governor Sethaput Suthiwartnarueput said, as the tourism-reliant country deals with a third wave of coronavirus infections.

The latest outbreak, spurred by a highly contagious variant, has caused nearly 48,000 infections in just over a month, dealing a blow to the country's already weak economic recovery.

"We had thought this crisis would be severe but short, but it's clearly shown that it won't end quickly," the governor said in a recorded interview with television channel PPTV, aired late on Thursday.

The crisis is more difficult to resolve than the 1997/98 Asian financial crisis as it has had a widespread impact on smaller businesses and households, he said.

However, Southeast Asia's second-largest economy is not expected to plummet because of the country's solid fiscal and financial positions, Mr Sethaput said.

The export and manufacturing sectors have not been affected but the tourism sector, which employs 20% of the total workforce will recover very slowly, he said.

Thailand's high household debt has also weighed on the economic recovery, Sethaput said.

The governor reiterated that overall liquidity remained sufficient but there was a problem of liquidity distribution to needed groups.

On Wednesday, the central bank left its key interest rate steady at a record low of 0.50% for an eighth meeting, but warned of outbreak risks.

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