While price pressures in Southeast Asia’s second-largest economy have been cooling, inflation in December was still 5.89% – well above the central bank’s 1-3% target, reports state news agency NNT.
Twenty-one of 23 economists polled by Reuters expect the BOT to raise its benchmark one-day repurchase rate by 25 basis points (bps) to 1.50% on January 25. The remaining two forecast no change, the NNT report noted.
Thailand, one of Asia’s most popular tourist destinations, is expected to receive at least 5 million Chinese tourists and a total of 25mn foreign visitors this year, providing a much needed boost to an economy severely impacted by the global pandemic.
The poll showed Thailand’s economy is expected to expand 3.7-3.8% this year and next, respectively, in line with government projections.
Nearly 70% of respondents, or 15 of 22, expect another hike of 25 basis points to 1.75% by end-March. Six forecast rates at 1.5% by then, and one said it would still be at 1.25%.
The poll median showed that the central bank would then raise borrowing costs by another 25 bps, taking it to 2% by end-September.
Poll medians showed inflation would average 2.8% this year and then fall to 1.9% in 2024.