BANGKOK, April 2 – Bank of Thailand Governor Prasarn Trairatvorakul has expressed optimism regarding Thailand’s economy despite lower growth in the first quarter compared to the final quarter of last year.
Appearing before the Senate’s standing committee on finance and banking, he said the economy will be in technical recession if it encounters a deficit in the second quarter.
Despite a technical recession, it would not be a cause for concern as the economic fundamentals–especially employment and business operations–remain positive, he said.
“Don’t give too much weight to economic recession or GDP deficit,” he said.
Whether the central bank will reduce this year’s GDP to 2.7 per cent depends on the economic performance of March-April, he said, adding that domestic consumption and investment have slowed down while exports have improved and tourism is on a positive trend after the state of emergency was revoked.
If the political turmoil is the cause of economic slowdown, political factions should hold talks to find resolution instead of resorting to the financial policy of reducing the interest rate, said Mr Prasarn.
He said the Bank of Thailand must be cautious in managing its fiscal policy as global interest rates are on a rising trend after the US Federal Reserve signaled an increase in interest rates.