Full recovery key to BoT raising policy rate
Seven missions push economic growth
published : 24 Feb 2022 at 04:02
newspaper section: Business
If the central bank wants to raise the policy rate, it has to be confident the economy is in full recovery first, says Finance Minister Arkhom Termpittayapaisith.
He made the remark at the seminar "2022 Next Economic Chapter: New Challenges and Opportunities" on Wednesday hosted by Krungthai Bank (KTB).
This year the US Federal Reserve is expected to raise its policy rate to tame rising inflation, said Mr Arkhom. The Bank of Thailand needs to consider if it wants to follow suit, he said.
Mr Arkhom said the government is focused on seven missions to push for economic expansion of 4% this year. The missions include the promotion of a digital economy in both private and state sectors.
Speaking at the same event, Digital Economy and Society (DES) Minister Chaiwut Thanakamanusorn said the government aims to push digital tech-driven businesses to contribute 30% of GDP by 2027, up from 17% now.
He said Thailand has several advantages over other Asean countries, particularly ICT infrastructure development thanks to the country's digital transformation roadmap and 5G network expansion.
Over the past few years, the DES Ministry has deployed free broadband internet access for 74,987 rural villages and upgraded submarine cable capacity to position the country as the digital centre of Asean, Mr Chaiwut said.
According to a report by Hootsuite in 2021, Thailand had 90.6 million mobile connections, or 129% of the population, 48.5 million internet users, which is 69.5% of the population, and 55 million active social media users, or 78% of the population.
The average speed of fixed broad- band services in Thailand was 308.3 megabits per second, second in the world, while average speed for mobile broadband was 51.7 Mbps, ranking 21st in the world.
Thais spent an average of 8 hours and 44 minutes per day on the internet, ranking ninth in the world.
To drive the country's economic recovery from the pandemic, he said the DES Ministry is scaling up efforts to boost capacity of digital infrastructure, including cloud-based data centres; push digital-driven business to contribute 30% of GDP by 2027; and working to thwart online fraud, threats and cybercrimes.
Mr Chaiwut said it is vital to boost public confidence in digital service, while cybersecurity measures are crucial to address online crimes, threats and fraud.
More than 7,000 complaints were lodged through the DES complaint centre about online violations last year.
Speaking at the same seminar, Payong Srivanich, chairman of the Thai Bankers Association (TBA) and president of KTB, said the banking sector supports the promotion of the digital economy.
Thailand has made a lot of progress in the digital banking domain. Mobile banking transactions skyrocketed to 15 billion in 2021 from 1.3 billion in 2017.
Transactions via the country's digital payment platform PromptPay increased to 9.4 billion in 2021, rising by 10 times from 2017.
He said digitalisation is a key factor reducing financial inequality, especially for the small and medium-sized enterprise (SME) segment.
According to central bank data, around 60% of total SMEs cannot access bank loans because of insufficient financial data.
Digital-based information, alternative credit scoring and digital lending will help SMEs better access financial resources, Mr Payong said.
The TBA, in collaboration with related parties in government and the private sector, has been gathering credit information from commercial banks, specialised financial institutions, non-banks, credit unions and others, he said.
The move is part of a government effort to tackle the country's household debt and the TBA is supporting the government and the Bank of Thailand in this arena, said Mr Payong.