Joint business group sticks by GDP outlook despite inflation risk

Joint business group sticks by GDP outlook despite inflation risk

FILE PHOTO: Travellers walk through the arrivals terminal at Suvarnabhumi International Airport in Samut Prakan province on July 1, 2022. (AFP)
FILE PHOTO: Travellers walk through the arrivals terminal at Suvarnabhumi International Airport in Samut Prakan province on July 1, 2022. (AFP)

The Thai economy is still expected to grow 2.75% to 3.5% this year, helped by increased exports, more tourists, and government support, but faces rising inflationary pressures, a leading joint business group said on Wednesday.

Exports are expected to increase 6% to 8% this year, up from a previous forecast rise of 5% to 7%, according to the group, which includes representatives from industry, banking and commerce.

Tensions between China and the United States over Taiwan could benefit Thai shipments and draw relocated investment to the Southeast Asian country, group chairman Payong Srivanich told a news conference.

The group, the Joint Standing Committee on Commerce, Industry and Banking, sees 7 million to 8 million foreign tourist arrivals this year, compared with nearly 40 million in 2019.

It forecast headline inflation of 5.5% to 7.0% this year, above the central bank's target range of 1% to 3%.

While the central bank is expected to start raising its key interest rate next week, commercial banks will not rush to hike their rates, said Mr Payong, who is also chairman of the Thai Bankers' Association.

The group urges the central bank to gradually hike the key rate in accordance with economic conditions. 

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