Thailand needs more resilience for sustainable growth – central bank chief

BANGKOK (Reuters) – Thailand’s central bank chief said on Friday the Southeast Asian country needs to be more resilient to grow sustainably.

Sethaput Suthiwartnarueput told a business seminar the country cannot take economic stability for granted, especially when risks from conflict in the Middle East may have high side effects.

Southeast Asia’s second-largest economy grew just 1.8% year-on-year in the second quarter, sharply slowing from the previous quarter, as weak exports and investment undercut strength in tourism.

Sethaput has said the economy is expected to grow close to forecast this year, but next year’s outlook of 4.4% growth would be revised down if the government’s handout plan was reduced.

On Friday, he said he was worried about high household and public debt, but that the country’s external stability remains strong.

In September, the Bank of Thailand’s monetary policy committee unexpectedly raised the key interest rate by a quarter point to 2.50%, the highest in a decade, saying growth and inflation should pick up next year. It will next review policy on Nov. 29.

The rate has been raised by total of 200 basis points since August last year to curb price pressures.

On Oct 28, Sethaput said the current policy rate remained appropriate for the economy but the BOT was ready to make adjustments if needed as he warned of increased global risks and concerns over the Middle East conflict.

(Reporting by Orathai Sriring; Editing by Kanupriya Kapoor)