The Bank of Thailand’s (BOT) Monetary Policy Committee (MPC) voted unanimously to cut the benchmark Rate by 25 basis points to a record low of 1.0%, the lowest in Asia outside of Japan.

According to the MPC official statement, Thai economy growth would be lower than its previous forecast, due mainly to the new coronavirus outbreak, delay of the 2020 fiscal budget disbursement and drought.

The Committee viewed that the Thai economy would expand at a slower rate in 2020 than previously forecasted and much further below its potential due to the outbreak of coronavirus, the delayed enactment of the Annual Budget Expenditure Act, and the drought that would affect a large number of related businesses and employment.

Thailand’s (BOT) Monetary Policy Committee (MPC)

The MPC official press release also stated that tourism figures were expected to grow at a much lower rate than previous forecast. Exports of goods would decline in line with trading partner economies and potential impacts of regional supply chain disruptions.

Regarding domestic demand, public expenditure would grow at a lower rate owing to the delayed enactment of the Annual Budget Expenditure Act which remained subject to high uncertainty.

Furthermore, private consumption would be restrained by moderating household income in the services, agricultural, and manufacturing sectors as well as by elevated household debt.

Consequently, the Committee will continue to monitor the downside risks from the coronavirus outbreak, the delayed budget disbursement, and the drought that could be more severe than previously assessed, together with trade tensions and geopolitical risks that remain highly uncertain.

About the author

Bangkok Correspondent at Siam News Network

Bangkok Correspondent for Siam News Network. Editor at Thailand Business News

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

You May Also Like

Four major Thai banks will close branches in Laos

Four major Thai banks, including Thai Military Bank, Bank of Ayudhya, CIMB Thai Bank, and Bangkok Bank, have decided to close their branches in Laos.

ASEAN Central Banks Consider Dropping US Dollar, Euro and Yen in favour of local currencies

ASEAN Finance Ministers and Central Bank Governors are meeting to discuss reducing dependence on major global currencies in favour of local currencies for financial transactions.

Taming Thai Household debt

The central bank has also set a goal of reducing Thai household debt to less than 80% of GDP to reduce financial and economic risks. As of the fourth quarter of last year, household debt stood at 15.1 trillion baht, accounting for 86.9% of GDP.