The central bank’s current official prediction is for growth of 3.5 per cent this year – a forecast it made in December.

However, two full months into the year, he said sideways risk was more likely to tie in with the lower end of the bank’s band of growth expectations, hence it needed to adjust its projection accordingly.

Veerathai added that monetary policy was currently not the proper tool to fuel the economy, and that while the government could act through fiscal policy, such a policy should focus on enhancing private investment that targeted productivity improvement more than on spurring consumer spending, |as before.

Stimulus packages driving consumer spa

Investment aimed at improving productivity is essential for Thailand in the long run, as such investment will lead to healthy economic growth, he explained.

Short-term policies to |stimulate the economy would still be important, but the government should have clear measures in place to promote projects that focus on productivity improvement, because that would be much more meaningful investment, he stressed.

Veerathai raised alternative energy as an example of investment that should be promoted, even though the Kingdom is currently enjoying lower fuel prices.

“The country should have more incentives to encourage micro-investment, such a|s in alternative energy and| agricultural products,” he added.

He also urged exporters to hedge against currency-exchange risk, as the Bank |of Thailand had seen many businesses tone down their hedging in light of the baht’s continued depreciation.