Thailand has experienced by far the slowest recovery from the pandemic in the region – with GDP just 0.5% bigger than it was in the final quarter of 2019. While much of the weakness is due to the slow recovery in the tourism sector, it hasn’t been the only factor. The government has stepped up pressure on the Bank of Thailand to do more to support demand. But with the central bank keen to protect its independence, these attacks could prove counterproductive. We think the BoT will cut interest rates only very gradually this year, with the first cut likely to be in June.
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