© Reuters. FILE PHOTO: Thai finance minister Arkhom Termpittayapaisith speaks throughout an interview with Reuters in Bangkok, Thailand, REUTERS/Athit Perawongmetha
By Kitiphong Thaichareon
BANGKOK (Reuters) – Thailand’s finance minister mentioned on Tuesday this yr’s financial outlook was nonetheless good regardless of the state planning company’s downgrade of its progress forecast, including he additionally hoped for a coverage price from the central financial institution that helps restoration.
A weak baht was good for exports although it made imports extra expensive, Finance Minister Arkhom Termpittayapaisith advised reporters. The foreign money has not too long ago been buying and selling at its weakest degree in virtually 5 years in opposition to the greenback.
Earlier on Tuesday, the planning company lower its 2022 progress outlook to 2.5%-3.5% from 3.5%-4.5% and raised its inflation estimate due to greater costs and slower world progress attributable to Russia’s invasion of Ukraine.
Arkhon mentioned the revised outlook “remains to be thought-about an excellent signal that the financial system remains to be recovering”.
Financial coverage ought to proceed to help Southeast Asia’s second-largest financial system as fund outflows have been small following the U.S. Federal Reserve’s coverage tightening, he mentioned.
“I nonetheless wish to see an rate of interest that’s constructive for the financial restoration, although we additionally should weigh fund outflows, which have not been a lot but,” Arkhom mentioned.
The Financial institution of Thailand (BOT) has left its key price unchanged at a document low of 0.50% since Could, 2020. It can subsequent evaluate its coverage on June 8.
With inflation already breaching the highest finish of the BOT’s goal vary of 1%-3%, some economists predict a price hike later this yr, somewhat than subsequent yr.
In a bid to mitigate the impression of excessive gas costs, the federal government agreed on Tuesday to chop the excise tax on diesel by 5 baht ($0.1447) per litre for 2 months, leading to a income lack of about 20 billion baht ($578.7 million).
However the tax discount wouldn’t have an effect on the nation’s total fiscal place on account of improved tax assortment, Arkhom mentioned.
“After that, we should see world oil costs once more whether or not there’s a want for added measures,” he mentioned.
($1 = 34.5600 baht)