Thailand’s economy expanded at the fastest pace in a year in the second quarter as eased COVID-19 restrictions boosted activity and tourism, reinforcing views that more rate hikes will be needed to curb inflationary pressures. | Reuters
That compared with a forecast 3.1 percent rise in a Reuters poll and a revised 2.3 percent growth in the March quarter..
“Thailand’s economy kept rebounding in the second quarter of the year on the back of a reopening boost,” Capital Economics said in a note. However, it expects inflation to weigh on consumer spending and investment, with exports restrained by a global economic slowdown. “This is likely to persuade monetary policymakers to proceed carefully,” he said, predicting the Bank of Thailand would raise rates by another 25 bps at its November meeting, rather than at next month’s meeting.The central bank raised rates for the first time in nearly four years last week to 0.75 percent to counter inflation, signaling further gradual increases as the recovery gains momentum.
The government agency raised its 2022 forecast for headline inflation to 6.3 percent to 6.8 percent from 4.2 percent to 5.2 percent previously.