Financial markets worldwide face higher uncertainties next year because of the tight monetary policies of key central banks and decelerating global economic growth in 2023, says Bank of Thailand governor Sethaput Suthiwartnarueput.
The global inflation rate is expected to remain at a high level and most central banks worldwide will maintain a tight monetary policy to contain prices in 2023, he said.
Higher interest rates mean volatility for money markets worldwide, slowing the global economy next year, said Mr Sethaput.
The International Monetary Fund forecasts global GDP growth for 2023 and 2024 of 3.2% and 2.7%, respectively, he said at a seminar entitled "Thailand Next Move 2023: The Nation Recharge" held by Money and Banking magazine yesterday.
The Thai economy next year will be affected by the global economic slowdown in several areas, including the export sector, and could face rising energy prices and a stronger trend for the US dollar, said Mr Sethaput.
However, Thailand's buffers are sturdy enough to handle higher uncertainty, he said, thanks to strong international reserves, a stable financial system and a low level of external debt.
Mr Sethaput said the local economy remains on track. The Bank of Thailand assesses the GDP growth rate at 3.2% in 2023 before rising to 3.7% in 2024.
Given higher external risks amid clear signs of a global economic slowdown, the central bank forecasts exports would grow only 1% next year.
Thailand's economic expansion would mainly stem from contributions from tourism and domestic consumption, he said.
The central bank forecasts foreign tourist arrivals to total 10.5 million in 2022, rising to 22 million in 2023, supporting better income for the overall labour market.
"With clearer signs of a local economic recovery, the Bank of Thailand will maintain policy normalisation to support a smooth takeoff," said Mr Sethaput.
The central bank predicts the inflation rate peaked in the third quarter this year and should gradually decline to the target range of 1-3% in the second half of 2023.
He said the central bank would conduct monetary policy on a balance and resiliency basis to ensure economic growth and maintain the stability of prices and the financial system.
In addition, the central bank will continue to tackle household debt, building an environmental, social and corporate governance foundation as well as developing innovative financial instruments for the local economy, said Mr Sethaput.
