* Monetary policy must support fiscal policy - finance minister
* Fiscal policy key driver of economic recovery - c.bank chief
* Global tightening not a risk for Thai economy - c.bank chief
* C.bank chief sees economy back to pre-pandemic levels in Q1/2023 (Recasts, adds further support measures, detail)
BANGKOK, Nov 24 (Reuters) - Thai monetary policy must remain accommodative to underpin fiscal measures aimed at supporting businesses and households, the finance minister said on Wednesday, as the government tries to breathe life into the economy.
The Southeast Asian country has been hit hard by the coronavirus pandemic with its vital tourism sector still struggling. It reopened https://www.reuters.com/business/aerospace-defense/bangkok-welcomes-first-tourists-quarantine-free-holiday-2021-11-01 this month to quarantine-free foreign visitors after more than a year of strict entry rules.
"As fiscal policy will focus on spending to help people and businesses... monetary policy must stay accommodative to allow the fiscal sector to work fully," Finance Minister Arkhom Termpittayapaisith told a business seminar.
The government plans to approve $2.3 billion more support for rice farmers next week.
Thailand needed to curb the external dependence of the economy and future growth must be inclusive in order to weather shocks, Arkhom said, adding it might no longer be able to count on 40 million foreign tourists a year as before the pandemic.
Bank of Thailand Governor Sethaput Suthiwartnarueput also told the business seminar that fiscal and monetary policy must work in step to aid the economy, which is expected to return to pre-pandemic levels in the first quarter of 2023.
"Every policy has its limitations and side-effects, so monetary and fiscal policies must be coordinated to reach each goal," he said.
Fiscal policy will remain key for the recovery, which will be slow and uneven, Sethaput said, adding monetary policy would take time to have an effect and was not targeted.
The BOT, which sees economic growth of 0.7% this year and 3.9% next year, has left its benchmark interest rate https://www.reuters.com/article/idUSL4N2S019V at a record low of 0.50% since May 2020.
The BOT will help ensure the recovery is smooth with the financial system working and bad loans contained, he said.
Rises in global interest rates and inflation were not a big risk, but the BOT will monitor them, Sethaput said.
The economy will grow close to forecasts, but the recovery is fragile, according to minutes of the BOT's last policy meeting released on Wednesday. (Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Martin Petty and Ed Davies)
