TDRI says no stagflation in Thai economy

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BANGKOK, 15 September 2013 The Thailand Development Research Institute (TDRI) views that the Thai economy is slowing down but not having stagflation. It suggests that the next meeting of the Monetary Policy Committee should be monitored, especially its concerns over the problem of inflation and sluggish economy. 

According to TDRI academic Niphon Phuaphongsakorn, policy interest rate cut is effective in stimulating the economy in a normal situation; however, in an abnormal situation a different fiscal tool should be used. He said there was still no need for the government to borrow for economic stimulation and suggested the government reform the economic structure instead.

The economist played down the problem of stagflation, saying Thailand had an economic slowdown just like the rest of the world. The central bank was making sure that the inflation rate was within a target range while the Monetary Policy Committee was still maintaining the benchmark rate, he said.