Thailand’s central bank on Wednesday raised its key interest rate by 0.25 percentage points, effective immediately.
Piti Disyatat, Secretary of the Monetary Policy Committee (MPC) said the Committee voted unanimously to raise the policy rate from 1.50 to 1.75 percent.
The Thai economy should continue to expand, driven mainly by tourism and private consumption. Exports of goods are recovering and expected to gain strength in the second half of this year. However, the global economic uncertainty has increased, in part from persistent inflationary pressures and episodes of banking stresses in advanced economies.
Headline inflation would likely return to the target range in the middle of the year, but core inflation remains elevated with upside risks from higher cost pass-through and demand pressures.
The Committee deems a continuation of gradual policy normalization to be appropriate in light of the growth and inflation outlook, and voted to raise the policy rate by 0.25 percentage point at the meeting.
The Committee projects the economic growth to be 3.6 and 3.8 percent in 2023 and 2024, respectively.
A key impetus is the broad-based recovery in tourism, which should promote employment and labor income, in turn sustaining private consumption. (TNA)