New headache for Thai government: consumer prices on the rise after Covid-19 slump
A Southeast Asia’s second-largest economy to recover from a Covid-19 slump, rising consumer prices are a new headache for the Thai government.
Forbes published a list of Thailand's richest people in 2022. You can see the full list here.
The government expects the impact of Covid-19 to be minimal in Thailand's tourism industry, which means that inflation will continue to increase. That, in turn, is expected to slow down household spending and make it difficult for the economy to grow. Also because of Russia's war in Ukraine and China’s slowdown (a major export destination), the government has lowered its growth forecast for 2022. GDP is now projected to expand by 3.4% in 2022, 4.3% in 2023 and 3.6% in 2024
In order to keep inflation in check, the central bank announced that it will be reducing its "very accommodative monetary policy". The risk is that a rise in interest rates will further reduce domestic consumption.
In June, Thailand announced a $1.6 billion bond issue to address the budget deficit, which is expected to have risen to 6.7% of GDP in the second year of the pandemic before falling back to 4.6% this year. Prayut Chan-o-cha's government is placing its hopes on a $93 billion budget bill for 2023 in order to help boost Southeast Asia's second-largest economy. However, critics say that it could be a debt trap that benefits only few and argue for investments that will strengthen the economy in the long term