BANGKOK- Thailand's economic activity improved in April following an easing of COVID restrictions, but remained under pressure from rising living costs after a slowdown the previous month, the central bank said on Friday.

Factors to be closely monitored include a rise in production costs and product prices, the spread of the COVID-19, and lockdown measures in major cities in China, Thailand's major trade partner, the Bank of Thailand (BOT) said.

Despite the March slowdown, Southeast Asia's second-largest economy in the first quarter still performed better than the final quarter of 2021, helped by higher exports and foreign tourist numbers, senior director Sakkapop Panyanukul told a briefing.

"The economy is still on a recovery path," he said.

A weak baht is good for exporters but it also pushes up import costs and inflation, he said, adding the baht was likely to remain highly volatile but the central bank was ready to act on any excessive moves.

"It's the duty of the BOT to ensure that currency volatility will not affect the recovery path or future inflation," he said.

The baht weakness had been moderate compared with regional currencies, he said.

The baht traded at 34.26 per dollar on Friday, hovering at the lowest level in almost five years.

In March, activity slowed due to declining domestic spending although exports rose 18.9% year-on-year, with a current account surplus of $1.2 billion in the month, the BOT said in a statement.

(Reporting by Orathai Sriring, Kitiphong Thaichareon and Satawasin Staporncharnchai; Editing by Martin Petty)