BANGKOK, (Reuters) – Thailand’s March economic activity was hit by rising coronavirus infection rates and increased inflation due to higher energy prices. This comes after a month of recovery, according to the central bank on Thursday.

The Bank of Thailand (BOT), reported that overall business activity was stable in March. However, the baht fell after an escalated Russia-Ukraine war.

Senior BOT director Chayawadee Chai Anant stated that Southeast Asia’s second largest economy must, however, continue to be on the recovery path.

She said that the economy had “recovered but not quite as strongly” in the first quarter, and added that the recovery would continue into the second quarter.

Comparing to a year prior, the fourth quarter 2021 saw an increase of 1.9%.

Due to the effect of the conflict in Ukraine, Wednesday’s BOT economic growth projections for 2022 were lowered to 3.2% from 3.4%. The BOT also increased its headline inflation rate to 4.9%.

In February, the economy recovered due to stronger exports and more foreign tourists after an easing of coronavirus curbs that also helped improve manufacturing, the BOT said in a statement https://www.bot.or.th/English/MonetaryPolicy/EconomicConditions/PressRelease/DocPressRelease/PressEng_February2022_9xp4w3.pdf.

The key driver of economic growth was 16.0% increase in exports in February compared to a year ago, while imports rose 14.2% year on year, leading to a $3.4 billion trade surplus.

Following a deficit $2.2billion in the month before, this country had a current accounts deficit of $652million in February.