Thai Central Bank: 4% GDP suitable, more stimulus unnecessary

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BANGKOK, July 30 – The Thai economy will successively expand and the forecast gross domestic product of 4 per cent for this year is appropriate and realistic, according to the central bank chief.

Prasarn Trairatvorakul, governor of the Bank of Thailand (BoT), said after meeting with Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong yesterday that the Thai economic growth has been in tandem with the global economic situation.

There remains growth potential for Thailand given the appropriate employment rate, people’s higher income and the state’s investment plans for mega projects in the future, he said.

The economy in the G3 group–including the US, Europe and Japan– is reviving and it will be unnecessary for the government to issue economic stimulus measures in the second half of the year, said Mr Prasarn.

The next challenges are maintenance of the economic growth and elimination of obstructions against the country’s competitiveness such as labour shortage and improvement of production efficiency.

The BoT chief said Mr Kittiratt has assigned the central bank to monitor and create understanding among the people on liquidity in the monetary system given his concern that commercial banks did not reduce their interest rates after the  Monetary Policy Committee announced a policy interest rate cut to 2.50 per cent.

Mr Prasarn, however, reported that the deputy prime minister/finance minister said that commercial banks must retain their customer bases to ensure liquidity for the government’s upcoming investment on mega projects.

Mr Prasarn gave assurances that liquidity in the monetary system would be sufficient for business operations and that the BoT would ensure a demand and supply balance.

The central bank has closely monitored and is equipped with mechanisms to cope with the volatile global economy and inflows and outflows of foreign capital, he said.