Thailand’s central bank, despite differing views on certain issues, has expressed readiness to collaborate with the finance ministry under the new government. Prime Minister Paetongtarn Shinawatra, who recently took office, has raised concerns about central bank independence being an hindrance to economic growth. This is in contrast to the previous Prime Minister, Srettha Thavisin, who was removed from office by a court order and had been advocating for interest rate cuts by the central bank to stimulate growth. Bank of Thailand Governor Sethaput Suthiwartnarueput emphasized the importance of the central bank’s independence while also highlighting its accountability.
Despite calls for interest rate cuts, the central bank opted to keep its key interest rate unchanged for the fifth consecutive meeting. Governor Sethaput mentioned that the current interest rate level was deemed neutral, awaiting potential changes in economic policies under Prime Minister Paetongtarn’s administration. He also stated the willingness of the bank to make necessary adjustments to policy rates based on evolving economic conditions.
Prime Minister Paetongtarn has mentioned a review of the government’s digital wallet cash-handout programme worth 500 billion baht, signaling a potential shift in economic policies. Thailand’s economy experienced a growth rate of 2.3% in the second quarter of the year, showing improvement from the previous quarter. However, analysts have raised concerns about uncertainties in fiscal policies impacting the economic outlook. Governor Sethaput maintained that economic growth and inflation projections align with the central bank’s forecasts.
Future Prospects
Looking ahead, the central bank projected a growth rate of 2.6% for the current year following a 1.9% expansion in the previous year, which lagged behind other regional economies. The willingness of the Bank of Thailand to collaborate with the new government, despite differing views, indicates a commitment to supporting the country’s economic stability and growth. As the government unveils its economic agenda and policies, the central bank stands ready to adapt its monetary strategies accordingly.
The collaboration between the central bank and the government is crucial for ensuring a cohesive and effective approach to driving economic development in Thailand. While differences in opinions may arise, it is essential for both parties to work together towards common goals for the benefit of the country’s economy and its people.