Inflation To Rein In 2011 Growth, Says Bank Of Thailand

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Inflation to rein in 2011 growth, says BOT

By THE NATION

Thailand's economy will decelerate to 3-5 per cent growth this year amid rising inflationary pressure, after growing 8 per cent in 2010, according to the Bank of Thailand.

Paiboon Kittisrikangwan, the BOT's assistant governor in charge of monetary policy, said the country's economic fundamentals remained solid, enabling growth as high as 8 per cent in the previous year despite political unrest and natural disasters.

According to the central bank, headline inflation is fore?cast to be 2.5-4.5 per cent this year, compared to an earlier forecast of 3-5 per cent, because of government measures to lower the cost of living.

However, these measures will cease in February so infla?tion may rise later this year.

The core inflation, which excludes energy and food prices, is forecast to be 2-3 |per cent, while average oil |price has risen to US$91.3 per barrel (Bt2,794) from $86.3 amid rising com?modity |prices.

Given that inflation has become a new risk to macro-economic stability, the central bank will continue its interest rate normalisation policy this year.

At the Monetary Policy Committee's last meeting on January 12, the benchmark rate was raised 25 basis points to 2.25 per cent. Further rate hikes are highly likely to tame inflation.

Methee Suphapong, a |senior official of the Bank of Thailand, said the central bank would ensure that inflation was within the target so as to maintain economic stability.

Regarding the exchange rate policy, the baht is now in the range of 30 to the US dollar, reflecting the country's eco?nomic fundamentals, com?pared to Bt28-Bt29 per dollar previously.

Deputy Finance Minister Pradit Pataraprasit said increased global economic volatility, the European public-debt crisis, rising oil prices and natural disasters are the key risk factors for the Thai economy in 2011.

Meanwhile, foreign investors' net sales of Thai equities amounted to Bt7.7 billion yesterday, the highest since May 2010, resulting in the SET Index dropping 15.59 to close at 1006.57, with a trading volume of Bt36.9 billion.

-- The Nation 2011-01-22

[Chunky1]

"Further rate hikes are highly likely to tame inflation."

2.25 percent is not going to tame anything. vegetables up 25% yoy in 2010. rofl.

[Ricardo]

And of course higher BoT interest-rates can only further-damage Thai tourism and manufacturers-for-export, by strengthening the Baht, as well as reduce what we farang-residents living on overseas-earnings or pensions have to spend in the Thai-economy.

But perhaps this will reduce the cost of imported-beers, if they ever actually start to bring the stuff in, "Cheers !".

[sirchai]

And of course higher BoT interest-rates can only further-damage Thai tourism and manufacturers-for-export, by strengthening the Baht, as well as reduce what we farang-residents living on overseas-earnings or pensions have to spend in the Thai-economy.

But perhaps this will reduce the cost of imported-beers, if they ever actually start to bring the stuff in, "Cheers !".

How would this country be without our money???? :jap: