Kitiphong Thaichareon and Orathai Shriring

BANGKOK, (Reuters) – Thailand’s economy may grow by 3.0%-3.5% in 2013, less than the earlier projections due to soaring crude oil prices driven mainly by Russia-Ukraine conflict. The key interest rate should also remain low in order to support recovery, said the finance minister on Monday.

Strong exports will support Southeast Asia’s 2nd-largest economy. They could increase 5%-6% this year. Additionally, improved tourism is expected as government plans to relax more pandemic related curbs. Arkhom Termpittayapaisith, Reuters interviewer, said that the country would be supported by strong tourist and stronger exports.

According to him, “Growth should be between 3.0% and 3.5% this year” as there are many government infrastructure projects that will be finished.

After expanding 1.6% in 2012, the state planning office predicted that the economy would expand 3.5%-4.5% by February. That is one of the slower rates in the region.

Arkhom stated that the economy will also grow in the first quarter, both for the year as well as the quarter.

As the government attempts to control higher inflation, the government’s monetary policy must continue to help the recovery, he stated. It is likely to reach 3%-4% on average in the year ahead, slightly more than the central banks 1%-3% goal range.

He said that the central bank should not raise interest rates “on the monetary side”, referring to his remarks.

To maintain economic support, the central bank has kept its key interest rates at an unprecedented low of 0.5% since May 2020. The central bank will likely keep its policy the same when it meets next Wednesday.

Arkhom stated that the current level of the currency baht was “appropriate”, and it supports exports.

Although the baht might swing, at 33 baht per $1, everybody should be content.

He stated that the government had sufficient resources to support the economy, and no further borrowing was needed.