BANGKOK (Reuters) – Thailand needs to lift its long-term growth and the policy interest rate of 2.0% is robust for current circumstances, Bank of Thailand Governor Sethaput Suthiwartnarueput said in a speech delivered earlier this week and released on Friday.
“We consider growth, inflation, and financial stability when deciding rates,” he said in the speech to the Japanese Chamber of Commerce, a transcript of which was published on Friday.
The central bank made a surprise cut to rates last month from 2.25% to 2.0%.
“We believe 2% is a good, robust rate suitable for a wide range of outcomes, and we don’t plan to move rates frequently,” he said, adding that the Bank of Thailand sees economic growth this year slightly above 2.5%.
“We share the sentiment that a 2.5% growth rate isn’t satisfactory,” Sethaput said.
“We need long-term solutions, not just short-term economic boosts.”
The government has a growth target of 3% this year, and has said it is aiming to do better than that through stimulus measures worth $4.4 billion and other steps to boost activity.
Exports, a key driver of the economy, are expected to grow at a slower rate than last year’s 5.8%, Sethaput said.
Growth in Southeast Asia’s second-largest economy would also be supported by consumption, which was seen growing at slightly above 2.5%, and an increase in foreign tourist arrivals to 39.5 million, not far from pre-pandemic highs, he added.
Inflation was expected to be 1.1% this year, the governor said, adding that inflation being at the lower end of the central bank’s target range of 1% to 3% was not a concern.
The next rate review is on April 30.
(Reporting by Chayut Setboonsarng and Orathai Sriring; Editing by Martin Petty and John Mair)
