Prime Minister Yingluck Shinawatra said that the Government is making efforts to cope with impacts from volatility in global financial markets.
Speaking after the weekly Cabinet meeting, the Prime Minister revealed that the meeting had discussed concerns over the European debt crisis, which was leading to tumbling Asian markets.
She urged the people to remain confident in the sound foundation of the Thai economy, saying that impacts from volatility in the world economy might have panicked local investors. However, she said, all relevant agencies had been instructed to urgently restore confidence among investors.
The Prime Minister called on members of the media to help boost confidence in the Thai economy. As for the Government, she said that emphasis would be placed on generating more household income and strengthening the domestic economy.
Regarding a call by the private sector for the Government to review its populist policies, Prime Minister Yingluck said that all policies implemented by the Government were aimed at stimulating the country’s economy.
Moreover, the Government will accelerate infrastructure investment in order to generate employment. At the same time, it has still maintained fiscal discipline, putting in place an efficient fiscal risk management system.
Commenting on the European debt crisis, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said that the problem had continued some time and the Europeans would have to solve their problem. Thailand and other Asian countries have adjusted to the situation, so they felt only slight impacts.
Mr. Kittiratt stated that Thailand should focus on its local economy and not heavily rely on exports. Europe is one of Thailand’s major markets. To cushion impacts, Thailand should pay greater attention to export diversification in order to lessen the degree of export dependence on traditional markets.
Meanwhile, Governor of the Bank of Thailand Prasarn Trairatvorakul said that the Bank of Thailand was closely monitoring the volatility in the global financial markets. The recent sell-off by foreign investors in the Thai stock market was not worrisome, when compared with the flow-in capital. The Bank of Thailand was ready to cope with the situation, if the sell-off led to volatility in the baht. He believed that the sell-off would be in a short term because of worries about the euro-zone debt crisis.
Mr. Prasarn said that the Bangkok of Thailand is prepared to allow Thai investors to take more money out of the country in order to invest overseas. It will also conduct a study on a master plan concerning capital mobility to cope with flow-in capital in the long run and to prevent it from putting pressure on the baht and asset prices in Thailand.
Thailand’s economic growth expected to return to 2019 levels in mid-2023
Although the economy would recover next year, the recovery is still substantially below potential level resulting in a large output loss and could affect Thailand’s potential economic growth in the future with the economy expected to return to 2019 levels in mid-2023.
The Siam Commercial Bank (SCB), one of Thailand’s largest commercial banks, said in its latest economic outlook report that the country’s economy may wait until the second semester of 2023 to return to 2019 growth levels.(more…)
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