Bank of Thailand upbeat on Q1 rebound

Bank of Thailand upbeat on Q1 rebound

The Bank of Thailand assesses the economy as being on a recovery path in the first quarter this year, supported by the export and tourism sectors despite several uncertainties.

The central bank's senior director, Chayawadee Chai-Anant, said Thailand's economic outlook remains on a recovery trajectory for the first quarter, part of a gradual rebound that weakened from the fourth quarter of 2021.

The economy is expected to continue recovering in the second quarter, assuming the Omicron outbreak peaks next month during the Songkran festival.

Tourism and exports were the two sectors driving the economy in February, said the bank.

Foreign tourist arrivals in February increased to 152,954 from 133,903 in January, thanks to the resumption of the Test and Go programme on Feb 1.

In February, the value of merchandise exports after seasonal adjustment grew slightly by 0.9% on a month-on-month basis, supported by demand from trade partners.

The export growth was in several categories, such as petroleum-related products and agro-manufacturing products.

Furthermore, automotive and electronics exports showed signs of improvement thanks to recovering demand from trading partners.

Ms Chayawadee said private consumption and private investment slightly decreased in February compared with the previous month because of the prolonged Omicron outbreak amid high energy and food prices, which resulted in a decline in consumer confidence.

However, the government's stimulus measures remained a positive factor supporting purchasing power, she said.

In February, private consumption dropped by 0.6% month-on-month, while private investment declined 0.9%, according to the central bank.

Headline inflation increased because of energy and fresh food prices, while core inflation accelerated from prepared food prices due to increasing costs for ingredients. Headline inflation rose to 5.2% in last month.

"Looking ahead, the Thai economy will pick up gradually in March and the first quarter this year, continuing from the fourth quarter last year," said Ms Chayawadee.

"But there are downside risks because of several uncertainties including the Omicron outbreak, the Russia-Ukraine war and energy price concerns."

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