A Q1 number just this morning, better than expected, coming at two point seven
percent, beating estimates. If you take a look at the outlook for
the economy, are you encourage or discourage you?
The recovery has pretty much been in line, although we expected for the first
quarter we had a two point six numbers. So this came in ballpark close to that.
We expect the recoveries in talking to continue buoyed largely by recovery and
domestic consumption, which has been strong all throughout, and especially
for us, very importantly for us tourism. So we're sticking with our three point
six percent headline figure for GDP for this year.
And I expect that that, you know, that number should, should, should, should a
downturn, because that would be a risk to that outlook.
Given that the economy is very tied to China, it's seeing uneven recovery.
The tourism sector that you're looking out for may not be as high as
anticipated. Yeah, China is very, very important to
us. It accounts for about a third of our
tourists or normal periods, and about half include Hong Kong, about 50 percent
of exports. So what happens to China is is
absolutely critical. Yeah, part out part of that outlook that
I mentioned that intact recover is is contingent upon a good recovery in
China. And to be fair, one thing that we've
seen is that the recovery in China hasn't translated as much into exports
from us as much as we would typically see it.
So we would like but I think, again, if we look forward the recovery in tourism,
certainly that's pretty intact. We've seen the Chinese tourists come
back. We have a 28 million estimate for the
number of tourists coming this year, about 5.5 or that is expected to come
from China. That story is pretty intact, but the one
that there is a bit of a still some uncertainty about the outlook for
exports of China. We've looked, for example, our exports
overall pretty Covid to today. It's overall it's picked up from a by
about 70 percent in aggregate. But to China, it's lag.
It's gone up by about only 8 percent. So we'd like to see a bigger pickup from
China. Do you think the economy needs fiscal
stimulus at this point in time? I don't think it's the first thing that
the economy needs at this point. If we look again, I think the economy is
recovering quite well. Domestic consumption has been growing at
quite a solid clip for 4 plus percent easily and again.
The recovery in tourism is likely to contribute to that because tourism is
such an important driver of employment and incomes in Thailand.
So I think that whole consumption, domestic demand story is very intact and
therefore the need for stimulus type measures is less.
Now, I think in Thailand, as with a lot of countries, we're coming out of the
Covid and subsequent crises. And during that period, we saw a lot of
policymakers, both in the monetary and the fiscal side, put in large degrees of
stimulus, monetary policy, be extremely accommodative fiscal policies and very,
very highly stimulated. So I think now in overall terms, the
overall picture, it's a period of normalization.
It's a time for further consolidation and more fiscal solution rather than
stimulus in terms of the overall macro picture.
We're on the cusp of a new government in Thailand.
And if you take a look at the campaign promises, all the political parties
promised to spend. In fact, some estimates of just 92
billion dollars in excess of that. I'm just wondering what that might mean
for a country that's still reeling with high inflation.
Yes, inflation has eased or a 14 year high, but it's still high.
Yeah. Yeah.
First off, I think the most important impact in terms of the fiscal year is to
to make sure that the fiscal picture, the overall fiscal picture in terms of
fiscal stability, that's sound. I mean, I think right now there's again,
all around the world premium on that. And we've seen instances where the
market is ready to punish bad policies and policy.
They're announced and it's not clear how you're going to fund them doesn't
translate results in good outcomes. So that's I think, first and foremost
thing that needs to be addressed on the fiscal front to make sure that there's a
solid fiscal picture. But in terms of the fiscal impact on
inflation, again, a lot of that will depend upon the nature of the spending
that occurs. In the past, we've seen a lot of
spending occur in the form of subsidies for energy and whatnot that in terms of
inflation, in fact, is a bit different from the usual kind of pump priming type
expenditures. So a lot of that impact that you're
talking about in terms of the fiscal spending depends upon what kinds of
spending will occur. But again, I think in terms of the
overall picture, I would argue again that the focus should be more on trying
to gradually consolidate the fiscal picture, trying to maintain that fiscal
stability, because the economy overall in terms of recovery is is is is
progressing. When it comes to market policy, the Fed
is data dependent. Are you data dependent?
Every central bank is data dependent. But I like to phrase it that we like to
think of ourselves as the outlook dependent, meaning that data comes out
with the. Lag in policy impacts that occur with
the like. So if you're looking just the data and
the data out turns. It's like that old line about driving
and by looking at the rearview mirror. So we look at the data obviously, but
data so far as it informs how the outlook is evolving.
So for us, again, if you look at the inflation numbers with it.
What that means in our context is, yes, we've seen inflation come down.
Inflation was high, went up to about 8 percent, close to 8 percent last
September. It's tracked down.
It's come back within our 3 percent, 1 to 3 percent.
Headline inflation target range. Latest out turn is ballpark about two
point seven percent over the past two upturns.
But it's important not to be sanguine because if we look ahead, even though
inflation is likely to kind of be low for a while, there are risks of upside
inflation pressure coming from, again, the pickup in tourism that we expect to
see coming from, again, possible spending by the new government, coming
from possible promises made regarding the minimum wage.