Thai PM criticises central bank's interest rate hikes for economic impact

Thai economy: Thai Prime Minister Srettha Thavisin has criticised the central bank's decision to increase interest rates, stating that such moves have been detrimental to the economy. 

Thavisin, a real estate tycoon who assumed office in August, urged the central bank to refrain from actions that could negatively impact low-income households and small businesses. 

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The Thai government, under Thavisin's leadership, aims to stimulate growth in the country, which has lagged behind regional peers, with a growth forecast of approximately 2.4 per cent last year, falling short of the 2022 target.

In a social media post on Sunday, Thavisin expressed concern about the Bank of Thailand's decision to raise interest rates consistently, despite several months of negative inflation. 

He stressed that such a policy is not conducive to the overall economic well-being, particularly affecting individuals with low incomes and small and medium-sized enterprises (SMEs). 

The central bank had increased its policy rate by 200 basis points since August of the previous year to address inflation concerns, keeping it unchanged at 2.5 per cent in November. The next policy review is scheduled for February 7.

The country's headline inflation recorded -0.83 per cent in December, marking the eighth consecutive month outside the central bank's target range of 1 per cent to 3 per cent. 

Thavisin expressed his hope that the central bank would prioritise the welfare of the people by refraining from further interest rate hikes, especially when it contradicts the prevailing inflationary trends.

(With Reuters Inputs)