By Kitiphong Thaichareon

BANGKOK (Reuters – Thailand’s Finance Minister said Tuesday that this year’s economy outlook is still favorable despite the State Planning Agency’s downward revision of its growth forecast. Additionally, he expressed hope for a support rate from the Central Bank.

The weakening baht helped exports, but made it more difficult to import goods. Finance Minister Arkhom Terminpittayapaisith stated that this was despite the fact that it had increased the cost of imports. Recent trading has seen the currency trade at its weakest point in nearly five years, against the dollar.

On Tuesday the agency had reduced its growth forecast for 2022 to 2.5%-3.5%, from 3.5%-4.5% earlier. It also raised its inflation estimation due to higher prices and slow global growth.

Arkhon claimed that Arkhon believes the updated outlook is “still considered to be a good indicator that the economy has still been recovering”.

As fund outflows from the U.S. Federal Reserve have been low, it is important that monetary policy continues to be supportive of Southeast Asia’s second-largest economic sector.

Arkhom stated that he still wants to see an economic recovery rate, but it is important to consider fund outflows.

Since May 2020, the Bank of Thailand has kept its key rate at record low 0.50%. The Bank of Thailand (BOT) will review its policy again on June 8.

An inflation rate of 1.1%-3.3% has been reached, and economists are predicting a rate increase later in the year than next.

To reduce the negative impact of rising fuel prices, Tuesday’s government agreement reduced the diesel excise tax by five baht ($0.1447) per gallon for two months. This resulted in an estimated revenue loss of 20 billion baht ($578.7million).

Arkhom explained that tax collections have improved and the reduction in tax would not impact the overall fiscal position of the country.

He said, “After that we will need to see global crude oil prices again whether it is necessary for us to take additional measures.”

($1 = 34.5600 baht)