Thailand's inflation will likely slow down this year and there is no need for the central bank to raise interest rates aggressively like other countries, Bank of Thailand (BoT) deputy governor Mathee Supapongse said on Wednesday.
Policy normalisation will be gradual and will not affect the economy, which is improving this year and will be even better in 2024, Mr Mathee told an economic forum.
Finance Minister Arkhom Termpittayapaisith told the forum on Wednesday that the Thai economy is recovering slowly but steadily, boosted by a rebound in a vital tourism sector that will remain the key driver of growth this year.
Higher spending in the current fiscal year and the next will also increase investment, Mr Arkhom said.
Strength in the baht reduces import costs but also cut export volumes, he said.
Monetary policy and fiscal policy must work together to ensure the country's economic stability, said the minister
Monetary policy must be accommodative and does not create financial costs, he added.
On Monday, Mr Arkhom told Reuters that Thailand's economy could grow faster than forecast this year as a revival in tourism gathered steam, while the pace of monetary tightening to contain inflationary pressures remained "reasonable".
The BoT has raised the key rate by a total of 100 basis points since August to 1.50%, though the tightening cycle has been less aggressive than many of its regional peers as Thailand's economic recovery has lagged that of other Southeast Asian nations.
It will next review policy on March 29, when most economists expect a further gradual rate hike.
