Bangkok (VNA) – Thailand should adopt an expansionary policy mixbased on fiscal stimulus and monetary easing to achieve stronger and morebalanced growth, the International Monetary Fund said.
The fund gave a bright outlook to Thailand’s economic performance this year,with growth rising to 3.9 percent in 2017 and exports taking advantage of astrong recovery of global trade.
According to the Thai Ministry of Commerce, exports in February surged 10.3percent for the 12th straight month thanks to economic recovery and risingdemand of traditional trade partners.
However, the IMF said that export gains have not sufficiently trickled down tohousehold incomes and investments in other sectors.
An infrastructure push coupled with a more accommodative monetary stance wouldhelp support faster growth in domestic demand, it noted, adding that monetaryeasing and commitment to price stability would steer inflation back to thetarget.
A flexible exchange rate should be the first line of defence against externalshocks, with foreign exchange intervention confined to addressing disorderlymarket conditions.
The Bank of Thailand (BoT) on March 29 raised its economic growth forecast to 4.1percent from 3.9 percent earlier. The bank has kept its benchmark interest rateunchanged at 1.5 percent, near record lows, since a cut in April 2015. It willreview interest rate policy on May 16.
Most of the analysts expect no policy change for the rest of 2018. However,some predict that the BoT may increase interest rate in the second half of theyear.-VNA
The fund gave a bright outlook to Thailand’s economic performance this year,with growth rising to 3.9 percent in 2017 and exports taking advantage of astrong recovery of global trade.
According to the Thai Ministry of Commerce, exports in February surged 10.3percent for the 12th straight month thanks to economic recovery and risingdemand of traditional trade partners.
However, the IMF said that export gains have not sufficiently trickled down tohousehold incomes and investments in other sectors.
An infrastructure push coupled with a more accommodative monetary stance wouldhelp support faster growth in domestic demand, it noted, adding that monetaryeasing and commitment to price stability would steer inflation back to thetarget.
A flexible exchange rate should be the first line of defence against externalshocks, with foreign exchange intervention confined to addressing disorderlymarket conditions.
The Bank of Thailand (BoT) on March 29 raised its economic growth forecast to 4.1percent from 3.9 percent earlier. The bank has kept its benchmark interest rateunchanged at 1.5 percent, near record lows, since a cut in April 2015. It willreview interest rate policy on May 16.
Most of the analysts expect no policy change for the rest of 2018. However,some predict that the BoT may increase interest rate in the second half of theyear.-VNA
VNA
