BANGKOK – Thailand’s fiscal and monetary policy are still operating together to achieve 4% economic growth this year and ensure a full economic recovery, its finance minister said on Thursday.
The central bank had forecast Southeast Asia’s second-largest economy, which expanded 1.6% last year after a 6.2% contraction in 2020, would be fully recovered in 2024, Arkhom Termpittayapaisith said.
“Coordination between monetary and fiscal policy will continue until we are confident that the economy is fully recovered,” he told a business seminar.
Arkhom said escalation of the crisis involving Russia and Ukraine could affect Thailand, not only in terms of trade but tourism, as many of its visitors are from Russia.
In January, about 18% of the nearly 134,000 tourists in Thailand were Russian and in the year before the pandemic, Russians spent 102 billion baht ($3.14 billion) in the country, according to official data.
Thailand’s central bank has left its key rate at a record low of 0.50% since three cuts in 2020 to support the economy, while the government has introduced various measures with planned 1.5 trillion baht borrowing since the pandemic.
There remains 100 billion baht available to help the economy and a new borrowing plan was not yet considered, Arkhom said.
The government will mainly borrow domestically due to high liquidity and will borrow about $500 million from Japan this year, he said, adding more foreign loans would be considered if necessary later.
He expects the public debt to reach 62% of gross domestic product at the end of the current fiscal year ending September, up from 59% at the of December.
($1 = 32.45 baht)
(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Ed Davies, Martin Petty)