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BANGKOK (Reuters) – Thailand’s Finance Minister Pichai Chunhavajira stated on Tuesday that the country’s inflation target should be set higher than 1%, as he prepared to meet with the central bank governor to negotiate a new target range.
Pichai and Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, along with other officials, are scheduled to convene to discuss the inflation target.
The government has been advocating for an inflation goal above the current range of 1% to 3% in order to stimulate the sluggish economy, while the central bank has argued that the existing target has been effective for the economy since 2020.
Prior to the meeting, Deputy Finance Minister Paopoom Rojanasakul expressed concerns that inflation was too low and called for a higher target range.
From January to September, the average annual headline inflation stood at 0.20%, significantly below the target range.
Earlier this month, the BOT unexpectedly lowered its key interest rate by 25 basis points to 2.25%, marking the first rate cut since 2020 in October.
Throughout the year, the government had been advocating for a rate cut, arguing that interest rates were hindering economic activity. However, the central bank attributed sluggish growth to structural issues.
Pichai and Sethaput held a meeting earlier this month that lasted nearly two hours, during which Pichai stated that they discussed debt and liquidity concerns.
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