BANGKOK, July 1 (Reuters): Thailand's economy improved in May and activity showed a further recovery in June, supported by increased spending, exports, and a pickup in tourism as pandemic restrictions eased, central bank officials said have announced.
Risk factors being monitored, however, included an increase in costs and prices, shortages of production parts and the pace of a recovery in the vital tourism sector, Bank of Thailand (BOT) Senior director Chayawadee Chai-Anant said.
Southeast Asia's second-largest economy likely registered a clearer recovery in the second quarter as more foreign tourists returned, Chayawadee told a news conference.
Inflation would remain elevated, but should peak in the third quarter of this year, she said.
Senior director Sakkapop Panyanukul said headline inflation could hit 8% in some months during the September quarter. In May, inflation jumped to a nearly 14-year high of 7.1%, far above the BOT's target range of 1-3%.
Chayawadee said a weak baht was in line with regional currencies and there had been no capital outflow volatility.
The baht should recover later as the economy got stronger and more foreign visitors returned, she added.
On Thursday, a tourism group predicted a more upbeat 12-16 million foreign tourists this year. In pre-pandemic 2019, there were nearly 40 million foreign tourists.
In May, private consumption and investment improved from the previous month while exports rose by 11.3% from a year earlier.
Thailand's current account deficit widened to $3.7 billion in May due to higher remittance of profits and dividends by foreign businesses, the BOT said in a statement. - Reuters
