ID :
129672
Fri, 06/25/2010 - 09:25
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http://m.oananews.org//node/129672
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BoT chief believes state employee salary hike has little impact on inflation
BANGKOK, June 25 (TNA) – Bank of Thailand (BoT) Governor Tarisa Watanagase on Thursday affirmed the government’s decision to raise the the salaries of officials and government employees by 5 per cent in Fiscal 2011 will have little impact on inflation rates.
She said the payroll hike would consume around Bt30 billion or 0.3 per cent of the country’s gross domestic product (GDP). The amount would stem from the budget, which had been already set aside, not from an additional deficit budget.
It would have a psychological effect on entrepreneurs, who might opt to raise prices, but not by very much. Because of this, the central bank sees the core inflation rate staying in a range of 0.5-3 per cent although it tends to rise in tandem with economic recovery.
The BoT chief said the Thai economy would continue growing, boosted by increased exports and higher local spending, and the government’s need to rely upon monetary and fiscal policies to stimulate the economy has declined.
Mrs Tarisa said she believed the economy would be affected by sluggish tourism in the second half of this year because the government continues to impose its emergency decree, which has shaken tourist confidence.
Whether tourism recovers in the third and fourth quarters--its normal high season-must be monitored, she said, predicting that the Thai economy will grow 4.3-5.8 per cent as targeted. The greater flexibility of the Chinese yuan’s exchange rate will help boost Thailand’s exports. (TNA)
She said the payroll hike would consume around Bt30 billion or 0.3 per cent of the country’s gross domestic product (GDP). The amount would stem from the budget, which had been already set aside, not from an additional deficit budget.
It would have a psychological effect on entrepreneurs, who might opt to raise prices, but not by very much. Because of this, the central bank sees the core inflation rate staying in a range of 0.5-3 per cent although it tends to rise in tandem with economic recovery.
The BoT chief said the Thai economy would continue growing, boosted by increased exports and higher local spending, and the government’s need to rely upon monetary and fiscal policies to stimulate the economy has declined.
Mrs Tarisa said she believed the economy would be affected by sluggish tourism in the second half of this year because the government continues to impose its emergency decree, which has shaken tourist confidence.
Whether tourism recovers in the third and fourth quarters--its normal high season-must be monitored, she said, predicting that the Thai economy will grow 4.3-5.8 per cent as targeted. The greater flexibility of the Chinese yuan’s exchange rate will help boost Thailand’s exports. (TNA)
