The MPC may raise the policy rate twice more to 2% within this year.
This is a forecast from SCB EIC that the MPC is expected to continue raising interest rates at the March and May 2023 meetings by 0.25% each time and will reach 2% throughout this year.
Thailand’s economy grows 3.4%
SCB EIC expects Thailand’s economy to expand by 3.4% this year, driven mainly by tourism and private consumption. China opens faster than expected May cause more Chinese tourists to Thailand This has a positive effect on the tourism sector and related services. causing consumption to expand continuously
The export is not bright
Exports tend to be dull. This can be seen from the contraction in the value of Thai exports during the last quarter of 2022 following the global economic slowdown. This year’s exports may face pressure due to new import tariffs from key trading partners such as Europe and India. There will be some impact from this year onwards. Therefore, Thailand’s exports are expected to grow as low as 1.2% in 2023.
Headline inflation tends to slow.
Inflation has gradually declined from 6.1% in 2022 to 3.2% at the end of 2023, but is still above the target range of 1-3% due to high domestic energy and food prices.
The baht tends to continue to appreciate.
Since the beginning of 2023, the baht has appreciated rapidly, leading other countries in the region. The depreciation of the US dollar and the prospects for the recovery of the Thai economy benefited from the opening of China. The baht has appreciated 5.6% since the start of the year and is likely to continue this year. The first half of the year is in the range of 32.5-33.5 baht per US dollar and is expected to appreciate in the second half to 31.5-32.5 baht per US dollar.
Source – SCB EIC
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