Bank of Thailand hikes rate again, maintains 2022 growth outlook

Bank of Thailand hikes rate again, maintains 2022 growth outlook

Cuts 2023 GDP growth forecast to 3.8% from 4.2% earlier

The Bangkok skyline (Photo by Wichan Charoenkiatpakul)
The Bangkok skyline (Photo by Wichan Charoenkiatpakul)

The Bank of Thailand (BoT) raised its key interest rate modestly for a second straight meeting on Wednesday to tame 14-year high inflation and ensure a continued economic recovery, while maintaining its 2022 growth projection of 3.3%.

The recovery of Southeast Asia's second-largest economy has lagged that of other countries as its vital tourism sector has just started to rebound while investment remains sluggish, allowing the central bank to go slowly on rate hikes, despite bigger increases by many peers.

The BoT’s Monetary Policy Committee voted unanimously to increase the one-day repurchase rate by 0.25% to 1.00%.

Of 25 economists surveyed by Reuters, 22 had expected a quarter-point hike and three predicted a half-point increase.

"Thai economic recovery has continued to gain traction, driven mainly by tourism and private consumption," the BoT, among Asia's less hawkish central banks, said in a statement after a meeting.

"The overall growth and inflation outlook is consistent with the previous assessment."

The central bank maintained its 2022 economic growth outlook of 3.3% seen in June. It trimmed its 2023 growth forecast to 3.8% from 4.2% for 2023.

The BoT raised its 2022 headline inflation forecast to 6.3% from 6.2% seen earlier, and its 2023 estimate to 2.6% from 2.5%.

Earlier this month, Governor Sethaput Suthiwartnarueput said the BoT's goal was to ensure a smooth recovery for the economy, which he expected to return to its pre-pandemic level by late this year or early next. 


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