Thailand is expected to grow 3% to 3.5% this year as its weakened currency boosts foreign exports, its finance minister said on Wednesday.
Exports are predicted to rise by 8% this year as the baht hovers near 16-year lows against the dollar, Finance Minister Arkhom Termpittayapaisith said at a business seminar.
“But supply-chains’ problems, such as in the automobile and electronics sectors, are preventing exports from growing at its full potential,” Arkhom said.
Southeast Asia’s second-largest economy is still recovering from a severe economic slump caused by the Covid pandemic. Last year’s growth of 1.5% was among the lowest in the region.
But business has picked up in many sectors in recent months, helped by increased exports and a pickup in the crucial tourism sector – with over 5 million arrivals and more expected after Covid restrictions ended at the beginning of this month.
Arkhom’s growth projection for 2022 was matched by a leading joint business group and compared with 3.3% growth predicted by the central bank.
“Although the recovery may not be very fast, it’s a clear recovery,” he said.
Interest Rate Hikes
With Thailand dealing with high inflation and a weak currency, the Bank of Thailand (BOT) twice raised its key interest rate by a quarter point in the past two months, to ensure the recovery continued.
Headline inflation was less than expected in September, decelerating from the previous month, but above-target consumer prices reinforced expectations of a further interest rate hike from the central bank in November
Government spokesperson Anucha Burapachaisri said on Wednesday the government would not interfere with the BOT’s work but would let the Finance ministry support it with information.
- Reuters, with additional editing from Alfie Habershon