FILE PHOTO: People wearing face masks shop for street food in Chinatown amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, January 6, 2021. REUTERS/Athit Perawongmetha
February 11, 2022
By Orathai Sriring and Satawasin Staporncharnchai
BANGKOK (Reuters) – Thailand’s headline inflation rate is expected to top the central bank’s forecast of 1.7% this year, but should remain within its target range, central bank officials said on Friday.
Inflation would exceed the Bank of Thailand (BOT)’s target range of 1-3% in early 2022 before falling in the second half of the year, they said.
“For the whole year, we still look at no more than 3%,” senior director Sakkapop Panyanukul told a news conference.
Sakkapop said most economic indicators were largely in line with the BOT’s estimates so far this year, though there was an improvement in exports and a rise in inflation. In January, inflation jumped to a nine-month high of 3.23%.
The BOT has forecast economic growth of 3.4% this year, with exports rising 3.5%. It is due to update that data next month.
On Wednesday, the BOT left its key interest rate unchanged at a record low of 0.50% and ruled out an immediate need to adjust despite higher inflation and looming U.S. policy tightening.
The BOT reiterated that planned interest rate hikes from the U.S. Federal Reserve would have little impact on Thailand as its external stability remains strong with high foreign reserves and low foreign debt.
“There will be spillover effects on Thailand, but quite limited,” Sakkapop said.
Senior director Surach Tanboon said Thailand’s monetary policy does not follow that of foreign countries, though the BOT would monitor global developments.
Earlier on Friday, Finance Minister Arkhom Termpittayapaisith said the government would next week consider measures to mitigate the impact of soaring fuel prices, but did not elaborate. Diesel prices would continue to be capped at 30 baht ($0.9) per litre, he added.
($1 = 32.72 baht)
(Reporting by Orathai Sriring, Kitiphong Thaichareon, Satawasin Staporncharnchai; Editing by Kanupriya Kapoor)
