Bank of Thailand Governor Sethaput Suthiwartnarueput signaled that the central bank will stick to its gradual and measured monetary tightening to curb inflation, although price gains have returned to target.

“I think we’re not done on the inflation front yet,” Sethaput said in an interview with Bloomberg Television’s Haslinda Amin in Bangkok on Monday. The central bank is due to review monetary policy settings on May 31.

A relative laggard in the global interest rate-hiking cycle, Thailand has stuck to small increments to borrowing costs even as peers around the world have either paused or signaled room to stand pat. While domestic inflation returned to the BOT’s 1%-3% target in March, a faster-than-expected pace of economic recovery is keeping the central bank guarded on price pressures.

“Yes, we’ve seen inflation come down, but it’s important not to be sanguine,” Sethaput said. “If we look ahead, even though inflation is likely to be low for a while, there are risks of upside inflation pressure,” including tourism uptick, spending from a new government, and minimum-wage promises, he said.

His comments follow data earlier Monday that showed the economy benefited from a resurgent tourism sector, with the outlook hinging on political stability. Results from Sunday’s vote showed pro-democracy opposition parties were the biggest winners, in a rebuke to the military-led establishment that has ruled for close to a decade.

While it remained unclear who would emerged as prime minister, Sethaput said the government should focus on fiscal consolidation.

“The focus should be more on trying to gradually consolidate the fiscal picture” because the economic recovery is “progressing,” the BOT governor said. “In terms of fiscal impact on inflation, a lot of that will depend upon the nature of the spending that occurs.”

Thai political parties have promised billions of dollars worth of freebies in a bid to woo voters in the general election. Sethaput had warned last month that subsidies and populist promises with eye on votes could pose fiscal risks if implemented.

While the BOT has scope to sustain its gradual policy tightening to check price pressures as tourism powers spending, inflation that’s already returned to the central bank’s 1%-3% target band boosts the case for halting rate increases.

Headline inflation eased for a fourth straight month in April, according to the Commerce Ministry that forecasts the pace to decelerate below 2% in May. Price gains of 2.67% last month are at the slowest in more than a year and have come off dramatically from 14-year highs in 2022.

--With assistance from Suttinee Yuvejwattana and Sabrina Mao.