Thailand's exports are seen recovering next year, the Bank of Thailand (BoT) said in a statement on Wednesday.
Inflation was expected to be low next year due to government subsidies, the BoT said, adding that inflation would increase gradually but stay within its target range of 1-3%.
The country’s economic recovery is intact but structural impediments could limit the positive impact of the global economy on exports, and credit quality must be monitored, minutes of the central bank’s Nov 29 monetary policy meeting showed on Wednesday.
The BoT said that financial conditions had tightened and it was monitoring the credit quality of small businesses and households.
At the meeting, the Monetary Policy Committee (MPC) unanimously voted to keep its one-day repurchase interest rate unchanged at 2.50%, the highest in a decade, after hiking it by 200 basis points since August last year to curb inflation.
The committee said the policy rate was appropriate for long-term growth, but saw urgency in providing a lift to the economy including infrastructure investment and labour upskilling programmes, the minutes showed.
The economy grew much lower than expected at 1.5% in the July-September quarter from a year earlier, the slowest pace this year, on weak exports and government spending.
Prime Minister Srettha Thavisin has said the economy is in a “crisis”.
The central bank will next review policy rates on Feb 7, when most economists expect no policy change.
Even though the Consumer Price Index (CPI) has recorded two straight months of contraction, this mainly reflects government subsidies and not deflation, the central bank says.
The BoT forecast headline inflation to average 1.3% this year, down from 1.6% projected earlier. It sees 2024 inflation at 2.0% but this does not factor in the potential impact of the government’s 500-billion-baht digital wallet stimulus programme.
The headline CPI fell 0.44% in November, though core CPI rose 0.58% during the month.
October and November headline inflation would have been 0.9% and 0.7%, respectively had it not been for subsidies, BoT data showed.
The government has cut energy and electricity prices to alleviate the cost of living.
Separately, central bank officials told an analysts’ briefing on Wednesday that tourist arrivals would return to pre-pandemic levels by late 2025, driven by non-Chinese visitors.
The BoT has revised down its forecast of Chinese arrivals in 2024 to 6.2 million from 7.5 million predicted earlier. In 2025, the central bank expects 7.8 million travellers from China — still well below the nearly 11 million recorded in 2019, when the country welcomed a record 40 million foreign arrivals overall.