Finance

Thai progress outlook good regardless of planning company’s downgrade, finance minister says

  • Finance Minister desires to see coverage fee that helps progress
  • Says weak baht good for exports however makes import extra pricey
  • Says fund outflows have been small after Fed’s tightening

BANGKOK, Could 17 (Reuters) – Thailand’s finance minister mentioned on Tuesday this 12 months’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 fee from the central financial institution that helps restoration.

A weak baht was good for exports although it made imports extra pricey, Finance Minister Arkhom Termpittayapaisith advised reporters. The forex has not too long ago been buying and selling at its weakest stage in virtually 5 years in opposition to the greenback.

Earlier on Tuesday, the planning company reduce 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. learn extra

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Arkhon mentioned the revised outlook “remains to be thought-about a superb signal that the economic system remains to be recovering”.

Financial coverage ought to proceed to help Southeast Asia’s second-largest economic system as fund outflows have been small following the U.S. Federal Reserve’s coverage tightening, he mentioned.

“I nonetheless need to see an rate of interest that’s optimistic 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 fee (THCBIR=ECI) unchanged at a file low of 0.50% since Could, 2020. It’ll subsequent evaluation its coverage on June 8. learn extra

With inflation already breaching the highest finish of the BOT’s goal vary of 1%-3%, some economists predict a fee hike later this 12 months, moderately than subsequent 12 months.

In a bid to mitigate the influence 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 as a consequence of improved tax assortment, Arkhom mentioned.

“After that, we should see world oil costs once more whether or not there’s a want for extra measures,” he mentioned.

($1 = 34.5600 baht)

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Reporting by Kitiphong Thaichareon
Writing by Orathai Sriring; Enhancing by Martin Petty and Kanupriya Kapoor

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