BoT: External stability strong, economy recovering
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BoT: External stability strong, economy recovering

Inflation should return to target range of 1% to 3% in second half of 2023

File photo: Apichit Jinakul
File photo: Apichit Jinakul

Thailand's external stability is sound with low foreign debt and high international reserves, while the economy is recovering steadily on increased tourism and domestic spending, the Bank of Thailand (BoT) said.

The central bank's gradual and measured policy normalisation remained an appropriate approach, with headline inflation expected to ease and return within the bank's target range of 1% to 3% in the second half of the year, BoT deputy governor Mathee Supapongse said in a statement on Friday.

The strategy has helped prevent the private sector's cost of borrowing from rising too fast and given room for every sector to adjust, Mr Mathee said.

But the BoT was ready to adjust the pace and timing of its policy tightening should the outlook for the economy and inflation shift from its assessments, he said.

"The external strength has helped Thailand withstand with the impacts of external factors," the deputy governor added. 

The central bank has raised its policy rate by a total of 100 basis points since August to 1.50%. It is expected to hike the rate again by a modest quarter point at its next meeting on March 29, when it will also update economic projections.

In November, it predicted economic growth of 3.7% this year and 3.9% in 2024.

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