Thai economy faces severe shocks, slow recovery, central bank chief says


Economic problems can be solved but it will take time as there are "no magic bullets", Governor Sethaput Suthiwartnarueput told his first briefing.

BANGKOK: Thailand's economy faces severe shocks from the Covid-19 coronavirus pandemic and a recovery is expected to take at least two years to get back to pre-pandemic levels, the country's new central bank governor said on Tuesday.

Southeast Asia's second-largest economy, which is heavily reliant on trade and tourism, could shrink a record 7.8% this year, with tourism badly hit, the Bank of Thailand (BOT) has predicted.

Economic problems can be solved but it will take time as there are "no magic bullets", Governor Sethaput Suthiwartnarueput told his first briefing.

"The shocks are very severe, most notably on tourism," he said, adding the sector could lose 1.6 trillion baht ($51 billion), or 10% of GDP, with foreign arrivals expected at 6.7 million this year, compared to nearly 40 million in 2019.

But the country had a strong external position to withstand any shocks, said Sethaput.

The economy, which suffered its worst contraction in 22 years in the June quarter, is expected to post some growth in the second quarter of next year, he said.

Sethaput said the BOT would ensure that monetary policy and liquidity would not hinder the recovery.

"Our policy rate is the lowest in this region and a record low with limited room, so other measures, including fiscal ones, will have to play a major role," he said.

The BOT has cut the key rate three times this year to an all-time low of 0.50% to support the economy. It will next review policy on Nov. 18, when analysts expect no change.

The BOT would consider more measures as appropriate but it was in no rush to introduce them and would not rule out unconventional policies, Sethaput said.

"All reasonable options are on the table," he said.

The BOT would encourage capital outflows to help ease the baht strength, Sethaput said.

The BOT would closely monitor growing street protests which could affect confidence, consumption and tourism, he said. ($1 = 31.23 baht) - Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

100% readers found this article insightful

Next In Business News

OSK posts 3Q net profit of RM105.21mil
RHB Bank 3Q net profit slightly higher at RM622m
Tokyo Stock Exchange CEO to resign over Oct system failure
AMMB posts higher 1H underlying net profit of RM791.9m
BIMB posts 3Q net profit of RM135.81mil
Confidence in PN government lifts palm oil prices
KLCI takes pause as investors digest recent gains
AmInvest Research maintains Buy on Hong Leong Bank, FV RM19.30
Maybank’s 9M core net profit within CGS-CIMB Research’s forecast
RHB Research keeps Buy call on Public Bank, TP RM21.60

Stories You'll Enjoy