13-12-2023 (BANGKOK) In a recent monetary policy meeting held on November 29, the Bank of Thailand (BOT) underscored that while Thailand’s economic recovery remains intact, structural impediments may hinder the positive impact of the global economy on exports. The minutes of the meeting, released on Wednesday, also emphasized the need to monitor credit quality amid tightened financial conditions.
The BOT revealed that despite the ongoing economic recovery, there are concerns about the potential limitations on the positive influence of the global economy on Thai exports. The central bank highlighted the importance of closely monitoring the credit quality of small businesses and households, indicating a cautious approach to evolving financial conditions.
During the meeting, the monetary policy committee unanimously decided to maintain the one-day repurchase interest rate at 2.50 per cent. This rate, the highest in a decade, has remained unchanged since August last year when it was increased by 200 basis points to address inflationary pressures.
While affirming that the policy rate is suitable for long-term growth, the committee expressed a sense of urgency in providing a boost to the economy. The minutes revealed a consensus on the need for measures such as increased infrastructure investment and labour upskilling programmes to stimulate economic activity.
Thailand, the second-largest economy in Southeast Asia, experienced lower-than-expected growth of 1.5 per cent in the July-September quarter compared to the same period the previous year. This sluggish growth, the slowest pace in the current year, was attributed to weak exports and government spending, prompting Prime Minister Srettha Thavisin to declare the economy in a “crisis.”
The central bank is scheduled to review policy rates on February 7, and while most economists anticipate no policy change, the BOT’s emphasis on monitoring economic challenges and advocating for stimulus measures reflects the ongoing efforts to navigate through the complex economic landscape.
