Economy to take 0.3% hit from Omicron – Bank of Thailand

Economy to take 0.3% hit from Omicron – Bank of Thailand

Bank of Thailand governor Sethaput Suthiwartnarueput (File photo supplied)
Bank of Thailand governor Sethaput Suthiwartnarueput (File photo supplied)

The economy will take a 0.3% hit from an outbreak of the Omicron variant of Covid-19, although it should be managed within the first half of 2022, the Bank of Thailand (BoT) governor said on Tuesday.

The BoT has tools ready should the Omicron-driven outbreak last longer than anticipated, Sethaput Suthiwartnarueput told reporters.

 

He said he expects the economy to return to pre-pandemic levels in the first quarter of 2023 and that recovery continues to be fragile.

"This year will be no less challenging than what we faced in the past ... but the central bank is ready to introduce new measures if needed," he said.

Thailand on Tuesday reported over 7,000 new coronavirus infections, up from an average of about 2,600 in the final week of 2021.

Authorities raised the alert levels and rolled out curbs last week, including extending a suspension of the "Test & Go" scheme for vaccinated tourists to skip quarantine.

Inflation was gradually increasing in certain sectors, within the central bank's framework, but wages were still depressed, Mr Sethaput said.

Non-performing loans (NPLs) were gradually increasing, but would not surge, he said, as Thai banks were "strong and are able to handle the rise of NPLs".

The economy would see a limited impact from global monetary tightening policies due to its financial infrastructure relying more on bank loans over bonds, he added.

The economy is forecast to expand by 3.4% in 2022, the BoT said last week.

A "financial landscape" paper is set to be released on Feb 2 that would lay out guidelines for commercial banks and financial technology, he added.

Further details for financial institutions seeking to enter joint ventures in asset management companies would be given towards the end of the month, he said.

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