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Thai March economic activity pressured by rising inflation, infections

Thai March economic activity pressured by rising inflation, infections

FILE PHOTO: A view of Bangkok's port amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, June 21, 2020. REUTERS/Athit Perawongmetha

BANGKOK: Thailand's economic activity in March came under pressure from rising coronavirus infections and higher inflation driven by increasing energy prices, after a recovery in the previous month, the central bank said on Thursday (Mar 31).

Overall business activity was steady in March, while the baht depreciated following an escalation of the Russia-Ukraine conflict, the Bank of Thailand (BOT) said.

Southeast Asia's second-largest economy should, however, remain on the recovery path, senior BOT director Chayawadee Chai-Anant told a news conference.

The economy in "the first quarter recovered but not strikingly, compared with a very good fourth quarter," she said, adding the recovery was expected to continue in the second quarter of this year.

The economy grew a faster-than-expected 1.9 per cent in the fourth quarter of 2021 from a year earlier.

On Wednesday, the BOT trimmed its 2022 economic growth forecast to 3.2 per cent from 3.4 per cent and raised its headline inflation to 4.9 per cent, above its target range of 1 to 3 per cent, due to the impact of the war in Ukraine.

In February, the economy recovered due to stronger exports and more foreign tourists after an easing of coronavirus curbs that also helped improve manufacturing, the BOT said in a statement.

Exports, a key driver of growth, rose 16 per cent in February from a year earlier, with imports up 14.2 per cent year-on-year, resulting in a trade surplus of US$3.4 billion.

The country recorded a current account deficit of US$652 million in February after seeing a deficit of US$2.2 billion in the previous month.

Source: Reuters/ga

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