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Thailand Continues to Underperform: BoT

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Thailand’s economic growth potential is expected to hover around 3% for the next five years, according to Bank of Thailand governor Sethaput Suthiwartnarueput.

This is a decline from closer to 3.5% reported in the years before the Covid-19 pandemic.

Many households in Thailand are still grappling with rising inflation. Prices of fuel and fresh foods have continued to rise, with gasohol 95, vegetable oil, and eggs increasing by 40%, 32.5%, and 25%, respectively, over the past five years, according to the central bank.

“An economic growth potential rate of just 3% will not be sufficient to cover these increases,” the BoT governor admits.

Mr Sethaput said that while Thailand’s economy is recovering from the disruptions brought on by the pandemic, it is recovering at a much slower rate compared to its regional peers.

The slower recovery is largely due to the nation’s heavy reliance on tourism, which has been slow to rebound. Furthermore, various structural issues as well as high levels of household debt, are dampening economic growth.

“Structural reforms are necessary to enhance Thailand’s economic potential, especially in the long run,” Sethaput says.

The economy grew by a better-than-expected 1.5% in the first quarter of this year, but the pace slowed from 1.7% in the previous quarter.

The BoT projects GDP will expand by 2.6% this year and 3% next year.

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