Central bank says Thailand’s external position is stable and sound

With low foreign debt and high levels of international reserves, the Bank of Thailand reported that the nation’s external position is stable and sound and said that rising tourism and domestic spending would keep the economy on its steady path to post-pandemic recovery.

Bank of Thailand (BoT) Deputy Governor Mathee Supapongse said that the Kingdom’s gradual, measured policy normalization is still an appropriate approach at this time. The strategy has helped prevent the private sector’s cost of borrowing from rising too fast and given room for every sector to adjust to changing conditions.

The Kingdom has been battling inflation, partially as a result of pandemic stimulus spending and also from global supply chain disruptions and rising food and fuel prices. Nonetheless, the BoT has raised interest rates by just 100 basis points since August to 1.5 percent, far lower than the many Western countries also wrestling with price shocks.

“The external strength has helped Thailand withstand with the impacts of external factors,” Mathee said.

In February, headline inflation was measured at 3.79 percent, a 13-month low. But the BoT said that inflation would not return to the Bank’s target level of between 1 and 3 percent until the second half of this year.

According to BoT data, the Kingdom has foreign reserves of roughly $217 billion, up from just under $200 billion in September last year. The Kingdom’s external debt stood at $187 billion in the last quarter of 2022.

The Bank’s assessment is in line with global ratings agencies such as Fitch, which labeled Thailand’s outlook as stable last November, and S&P Global used the same word to describe the Kingdom’s financial standing that same month.

Photo courtesy of  https://www.bot.or.th/English/Pages/default.aspx