Thailand’s central bank forecasts export revival and low inflation
The Bank of Thailand (BoT) anticipates an export revival in the coming year, as revealed in a recent statement. The Bank also projects low inflation rates for the same period, attributing it to government subsidies, albeit with a gradual increase within an acceptable range.
Meeting minutes from the BoT’s November 29 monetary policy gathering, released on Wednesday, indicated that while Thailand’s economic recovery remains on course, structural issues might limit the positive influence of the global economy on exports. The central bank also emphasised the need for monitoring credit quality.
The BoT noted that financial conditions have become more stringent, prompting increased scrutiny of the credit quality for small businesses and household sectors, reported Bangkok Post.
During the meeting, the Monetary Policy Committee (MPC) opted for a unanimous vote to maintain the one-day repurchase interest rate at 2.50%, the highest it has been in the past decade. This decision comes after a 200 basis points increase since August of the previous year to control inflation.
The committee deemed the rate as suitable for long-term growth. However, it also expressed the urgency in providing economic support, including infrastructure investment and labour upskilling programmes, as detailed in the meeting minutes.
The economy of Southeast Asia’s second-largest country experienced significantly less growth than anticipated, standing at only 1.5% in the July-September quarter from the previous year. This slow pace, the lowest recorded this year, is a result of weak exports and government spending.
Prime Minister Srettha Thavisin described the state of the economy as being in a crisis.
The central bank is set to review policy rates next on February 7, with a majority of economists predicting no change in policy.
In related news, positive prospects are forecasted for Thai exports next year, with an anticipated growth rate of 3.6%. This rebound follows a projected 2% drop this year, according to a recent report by the University of the Thai Chamber of Commerce (UTCC). To read more click HERE
