Thai monetary policy must stay accommodative to support fiscal policy - Finmin

Fiscal policy will remain key for the economic recovery

  
A view of Bangkok city amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, June 21, 2020.

A view of Bangkok city amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, June 21, 2020.

REUTERS/Athit Perawongmetha

BANGKOK: Thai monetary policy must stay accommodative to support fiscal policy, while fiscal measures introduced must be supportive of business and households, the finance minister said on Wednesday, as the government tries to breathe life into its economy.

Future government measures will be for easing the pandemic impact and Thailand must shift to focusing on the domestic economy from high external dependence, Finance minister Arkhom Termpittayapaisith told a business seminar.

Bank of Thailand Governor Sethaput Suthiwartnarueput also told the seminar that fiscal and monetary policy must coordinate to help the economy, which is expected to return to pre-pandemic levels in the first quarter of 2023.

Fiscal policy will remain key for the economic recovery, which will be slow and uneven, he said.

Southeast Asia's second largest economy bottomed out in the third quarter and will grow close to forecasts, according to minutes of the BOT's last policy meeting released on Wednesday. 

The BOT forecast economic growth of 0.7% this year and 3.9% next year. It has left its benchmark interest rate at a record low of 0.50% since May 2020.

(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Martin Petty) ((orathai.sriring@tr.com;))


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