Thai government pushes for higher inflation range ahead of BOT meeting
Vendors sell pork at their stalls inside a market as Thailand is to inject US$15.2 billion into economy next year through its digital wallet policy, in Bangkok, Thailand, on Oct 2, 2023. (Photo: REUTERS/Athit Perawongmetha)
BANGKOK: Thailand's inflation target should work to lift inflation above 1 per cent, Finance Minister Pichai Chunhavajira said on Tuesday (Oct 29) ahead of a meeting with the central bank governor where he hoped to be able to reach an agreement on a new target range.
Pichai and Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, along with officials, are due to meet on Tuesday to discuss the inflation target.
The government has pushed for a higher inflation goal from the current 1 per cent to 3 per cent range to spur a sluggish economy, while the central bank has insisted the target, which has been in place since 2020, has worked well for the economy.
Ahead of the meeting, Deputy Finance Minster Paopoom Rojanasakul said inflation was too low and the target range should be higher.
In the January-to-September period, average annual headline inflation was 0.20 per cent, well below the target range.
Earlier this month, the BOT unexpectedly cut its key interest rate by 25 basis points to 2.25 per cent, the first reduction since 2020 in October.
The government had been pressing all year for a cut, saying interest rates had stymied activity. The central bank had responded that structural issues were weighing on growth.
Pichai and Sethaput met earlier this month in a meeting that lasted nearly two hours where Pichai said they discussed debt and liquidity issues.
