Thailand’s Finance Minister, Pichai Chunhavajira, has renewed his call for the central bank to lower borrowing costs and weaken the Thai baht to stimulate the country’s economy, particularly its crucial export and tourism sectors, Bloomberg reports.
He made his latest appeal on Monday, emphasizing the need for a “more competitive” currency.
Pichai is advocating for faster inflation and a weaker baht, arguing that these measures are necessary for Thailand to regain economic momentum. Notably, the Thai baht is the only currency in emerging Asia that has appreciated against the US dollar over the past three months, a trend the Finance Minister sees as detrimental to the country’s competitiveness.
The Finance Minister’s comments come ahead of the release of 2024 GDP data on February 17. He anticipates that the economy grew by 2.6%-2.7% in 2024, with a stronger 3.5% growth in the last quarter. While he projects a faster pace of 3%-3.5% for GDP growth this year, he stressed that it remains significantly slower than that of many neighboring countries, particularly Vietnam, which is aiming for 8% growth.
Pichai said that Thailand’s 2024 average inflation rate of 0.4% is “too low” compared to other countries, suggesting a need for it to increase.
The Bank of Thailand, which kept its policy rate steady at 2.25% last month after a surprise rate cut in October, is scheduled to review its monetary policy on February 26. Pichai expressed his desire for greater alignment between the government’s fiscal policy and the central bank’s monetary policy.
