Thailand's central bank governor emphasized the need for stronger economic growth to ensure sustainable expansion in the long term. The current growth rate of 3% is not sufficient for a low-income country like Thailand, according to Bank of Thailand Governor Sethaput Suthiwartnarueput.
Sethaput highlighted the importance of structural reforms to boost the potential growth rate and address issues such as weak exports, high household debt, and borrowing costs. The central bank has forecasted a growth rate of 2.6% for this year and 3% for the next year.
Despite calls for a rate cut to stimulate the economy, the BOT decided to maintain its key interest rate at 2.50% for the fourth consecutive meeting. The central bank remains vigilant about inflation and living costs, especially for grassroots households.
Deputy Finance Minister Paopoom Rojanasakul emphasized the need for better alignment between fiscal and monetary policies to support economic growth. The next rate review is scheduled for Aug. 21, with the central bank prepared to adjust its policies based on the economic outlook.
Analysis and Breakdown:
In summary, Thailand's central bank governor is urging for stronger economic growth through structural reforms to ensure long-term sustainability. The current growth rate of 3% is considered inadequate for a low-income country like Thailand. The central bank is focused on addressing issues such as weak exports, high household debt, and inflation to support grassroots households. Despite calls for a rate cut, the BOT has maintained its key interest rate, with a focus on aligning fiscal and monetary policies for better growth prospects. Investors and individuals should monitor the central bank's actions and policies to understand the potential impact on their finances and the overall economy.