BANGKOK, 18th July 2018 (NNT) – The former Governor of the Bank of Thailand (BOT), Prasarn Trairatvorakul, has projected a positive outlook for the overall Thai economy but suggests that the new administration should use fiscal policy to stimulate the economy in the short run.
The former chief of the central bank said an important factor in putting upward pressure on the baht currency is the implementation of monetary policy by the Fed which will likely decrease interest rates. Another factor is Thailand’s high current account surplus, which has led to an increase in foreign capital inflow, causing the Thai currency to appreciate more than others in the region. He said the central bank has already issued measures to prevent speculation on the baht currency.
As for the overall Thai economy, Mr. Prasarn said the economy is stable, inflation is not high and employment is still growing. However, he expressed concerns over the economic growth drop from 3.8% to 3.3% and its effects, including on low-income earners and the export sector. He suggested that the new government choose appropriate tools to spur growth, while preventing negative impacts on the country’s financial stability.
In the long run, the former BOT governor said problems in some sectors, such as agriculture and industry, must be solved with economic policy. Mr. Prasarn expressed his confidence that the BOT has other tools or measures to take care of the Thai economy. When to use them depends on appropriate timing and stability in Thailand.
