Thai GDP expected to grow 3.5%-4.5% in 2022 despite Omicron - FinMin

Thai GDP expected to grow 3.5%-4.5% in 2022 despite Omicron - FinMin

FILE PHOTO: Finance Minister Arkhom Termpittayapaisith speaks at the
FILE PHOTO: Finance Minister Arkhom Termpittayapaisith speaks at the "Bangkok Post International Forum 2021: Unleashing the Future: A Glimpse into 2022 and Beyond” on Dec 2, 2021. (Bangkok Post photo)

The economy is still expected to grow 3.5%-4.5% this year driven by fiscal policy, exports and investment, despite an outbreak of the Omicron coronavirus variant remaining a challenge, the finance minister said on Thursday.

Growth in 2021 is estimated to come in at only 1%, as the vital tourism sector has yet to recover significantly, but the resumption of Thailand's quarantine waiver for foreign tourists from next month should help, Finance Minister Arkhom Termpittayapaisith told a business seminar.

Export momentum should continue despite global supply chain disruptions, he said.

The government plans to invest 900 billion baht in infrastructure projects this year, Mr Arkhom said, adding there were also other public-private investment projects.

After earlier 1.5 trillion baht borrowing plans, the government can still borrow a further 10% of gross domestic product (GDP) if needed, he said.

"The fiscal position remains strong. In case of any crisis, the government is ready to support the economy," Mr Arkhom said.

With the price of goods rising, he said the government would try to keep inflation within its 1%-3% target range.

Sakkapop Panyanukul, a senior director at the Bank of Thailand (BoT), told the seminar inflation could be higher than forecasts but would not disrupt the recovery. The BoT sees inflation at 1.7% in 2022 and 1.4% next year.

The central bank expects GDP to show growth of almost 1% in 2021, and 3.4% this year, which was recently trimmed from 3.9% following the Omicron outbreak, he said. Official 2021 and fourth-quarter GDP data is due next month.

The BoT will keep financial conditions accommodative and focus on economic stability, Sakkapop said, adding global financial volatility would have a limited impact on Thailand and the BoT had tools to manage this.

The BoT has left its policy rate at a record low of 0.50% since May 2020, and most analysts see no policy change through this year. 

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