Business Maverick: Thai finance chief bets on tourism revival to spur faster growth

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The country’s Finance Minister Arkhom Termpittayapaisith sees a weaker baht supporting the nation’s post-pandemic tourism recovery as the key to improving the economy’s pace of expansion.

“Thailand is value for money,” Arkhom said in an interview on the sidelines of a meeting of finance ministers of Asia-Pacific Economic Cooperation in Bangkok. The baht is still competitive in the region and the central bank need not worry about capital outflows, he said.

His comments signal that the benefits of a weaker currency outweigh the negatives at the moment for the tourism-reliant economy, and that the Bank of Thailand’s measured approach to tightening monetary policy was appropriate in a world where central banks led by the Federal Reserve are employing large hikes to fight inflation.

While Arkhom doesn’t see the Fed halting its interest-rate hikes anytime soon, he sees the BOT’s gradual rate moves at home helping the economy’s recovery gain traction, even as inflation is near a 14-year high. Arkhom expects the economy to grow 3.7% next year, faster than the 3%-3.5% pace projected for this year, thanks to the return of foreign visitors.

Thailand, where tourism accounts for 12% of gross domestic product and a fifth of jobs, is betting that “” by foreign visitors lured by its broad reopening will help rev up recovery. Its growth is trailing regional peers after two years of pandemic kept tourists away, costing billions of dollars in an economy that hosted as many as 40 million overseas a year before the virus outbreak.moves in two meetings so far to protect the fragile recovery.

 

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