The Bank of Thailand (BoT) will work with the new government on coordinating fiscal and monetary policies to boost the economy after the Finance Ministry and central bank reduced economic stimulus measures amid signs of recovery.
Speaking at a monetary policy forum on Wednesday, the BoT's assistant governor, Piti Disyatat, said fiscal policy played a crucial role in supporting the economy through various stimulus measures during the Covid-19 pandemic.
The BoT also took an accommodative monetary policy stance to support borrowers during these challenging times.
As the economy bounces back and reaches pre-pandemic levels, the Finance Ministry and central bank are gradually phasing out stimulus measures.
Mr Piti said the outlook for the economy remains positive, with domestic consumption and the tourist sector fuelling growth.
GDP growth rate for 2023 is projected at 3.6% and 3.8% for 2024. Domestic consumption growth is expected to be 4% in 2023 and 3.1% in 2024, while foreign tourist arrivals are forecast to reach 28 million in 2023 and 35 million in 2024.
"With the positive trend of foreign tourist arrivals, the BoT may later review both the number of travellers and GDP growth rate for this year," Mr Piti said.
However, the central bank needs to monitor the potential risk of inflation due to rising global inflation trends. Improved domestic consumption and foreign tourist arrivals could also contribute to inflation, mainly through food and service prices.
According to Mr Piti, Thailand's inflation had already peaked and declined to the central bank's target range by March. It is expected to be within the range over the second quarter.
The BoT expects headline inflation to remain at 2.9% this year and decline to 2.4% next year. Core inflation, which excludes volatile food and energy prices, is expected to be 2.4% this year and 2% next year.
Mr Piti said business operators may pass on their higher cost burdens to consumers when demand increases, despite having not done it so far.
He said the BoT's Monetary Policy Committee will try to curb inflation and support the economic recovery.