The Bank of Thailand now sees the economy growing by 2.1% this year — an improvement from a previous forecast of just 1.5% — partly due to the government’s decision to borrow 400 billion baht, according to governor Vitai Ratanakorn.
Gross domestic product expansion is expected to rise to 2.6% next year, Mr Vitai said on Thursday.
The cabinet this week approved an emergency decree to borrow 400 billion baht to fund a consumption stimulus programme and green energy initiatives.
Mr Vitai said the central bank’s previous GDP forecast was based on 300 billion baht of borrowing.
The opposition Democrat Party is seeking a Constitutional Court ruling on the claimed necessity of the borrowing decree, but the government has expressed confidence in its strategy.
Inflation will be higher in the third quarter as a result of stimulus and subsidies to help vulnerable groups affected by high energy costs, Mr Vitai said.
The new “Thai Help Thai Plus” programme is expected to begin in June, with each eligible participant receiving 1,000 baht per month for four months, totalling 4,000 baht.
Thai headline inflation rose 2.9% in April, the highest in more than three years as a result of higher energy costs, according to the Ministry of Commerce.
For the full year, the ministry forecasts inflation in the range of 1.5% to 2.5% this year, inside the central bank’s target range of 1% to 3%.
