Bank of Thailand Chief Says Growth Outlook ‘Disappointing’

(Bloomberg) -- Thailand’s economic growth outlook of 2.8% next year is “disappointing” and policy makers are doing what they can to curb excessive gains in the currency, Governor Veerathai Santiprabhob said.

A “satisfying” level of growth should be about 3.5%-4% a year, the governor said in a speech in Bangkok on Monday. The Bank of Thailand is “actively managing the exchange rate” and monitoring short-term foreign inflows closely to avoid speculation in the baht.

The Bank of Thailand last week lowered its growth forecasts for this year and in 2020, given the weaker global backdrop, trade disruptions and a stronger currency.

Veerathai said a big risk to the economy is lower employment, adding that a number of manufacturers are relying on temporary workers, and some are reducing work hours.

He made the following comments about the baht, which has gained almost 8% against the dollar this year, the best performer in Asia:

• “Central bank is actively managing the exchange rate. Without our actions, the baht would be much stronger than the current level”
• “Still, we are careful of any excessive interference because there would be some side effects. It would also expose Thailand to more accusations as a currency manipulating country”
• “The country’s foreign currency reserves have jumped significantly because BOT buys a lot of dollars to slow the baht’s strength”
• “We are closely watching the inflows of short-term foreign funds. We don’t want to see the excessive speculation on the baht exchange rate”

--With assistance from Karthikeyan Sundaram.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram

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