BoT frets over global conflicts, campaign pledges
Bank of Thailand governor Sethaput Suthiwartnarueput said he is concerned about the impact of geopolitical conflicts and the possible risk of what he described as “strange political campaigns” on the economy.
Mr Sethaput said Thailand’s economic recovery remains on track amid several challenges that lie ahead.
He said the factors supporting recovery remain intact, including the rebound of domestic consumption and the tourism sector.
Mr Sethaput said the country has proven its ability to handle shocks with high immunity.
However, he is still concerned about the long-term impact of geopolitical conflicts.
Mr Sethaput also referred to “strange policies” regarding parties’ election campaigns, specifically those offering debt suspension.
Thailand is scheduled to hold a general election next year. Some political parties are campaigning on offering suspension of both loan principal and interest payments for a certain amount of debt for a prolonged period.
These campaigns could make some view Thailand as having high political risk, which could spill over to the financial and banking systems, he said.
Certain campaign pledges might sound good to voters, but could affect the country in the long term, said Mr Sethaput.
The country should not add new risks to the economy, he said, instead focusing on economic stability.
Mr Sethaput said the central bank is monitoring and evaluating the economy.
The bank plans to maintain a gradual policy normalisation, in line with the local economic situation.
The central bank forecast Thai GDP growth of 3.3% this year and 3.8% next year.
He said it is unlikely GDP would expand less than 3% next year.
The central bank and the Finance Ministry are working closely on economic management, said Mr Sethaput.
On Wednesday, Finance Minister Arkhom Termpittayapaisith said stimulus policies, especially broadbased ones, would be more targeted towards vulnerable groups.
Mr Arkhom said during the pandemic the past two years, fiscal policy played an important part in supporting the economy, mainly through the launch of cash handout programmes and stimulus measures.
As the government has already lifted all pandemic restrictions, he said fiscal policy will play less of a role, making way for monetary policy, which is the same approach used in other countries.