It is time Thailand's fiscal and monetary policies returned to normal, said Finance Minister Arkhom Termpittayapaisith.
He added that the country adopted irregular fiscal and monetary policies over the past two years in order to deal with the impact of the Covid-19 pandemic on the economy. Therefore, the Bank of Thailand did not raise the policy rate during that period.
The central bank's Monetary Policy Committee yesterday voted 6-1 to increase the one-day repurchase rate to 0.75% from a record low of 0.50%, which had remained unchanged since May 2020.
The move is aimed at taming surging inflation.
Mr Arkhom said the economy had begun to return to a normal situation, even though businesses and people's income have yet to fully return to pre-pandemic levels.
He added that the revenue of some businesses have now surged back to 70-80% of the revenue generated prior to the pandemic, while some sectors such as automotive and electronics have returned to fully utilise their production capacity.
However, the hotel sector's revenue has yet to return to the pre-pandemic level, he added.
It is expected that there will be 6-8 million foreign tourist arrivals this year, which is still far from around 40 million before the outbreak.
Mr Arkhom said commercial banks are expected take 3-6 months to gradually raise the deposit and lending rates after the central bank's rate hike.
The minister asked the Bank of Thailand to communicate with the commercial banks that they should consider the economic situation when adjusting the interest rates.
If they rush to raise the rates after the policy rate hike, their moves could stymie the economic recovery.
Mr Arkhom said the central bank should also manage the baht in a way that it is not too weak or too strong.
