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.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

APAC region records 119% QoQ growth in M&A deal value in Q2 2022

India, Australia and China were the top three countries when measured in terms of M&A deal value in Q2, with India accounting for half of the top 20 deals. South Korea, Indonesia, Malaysia, and Japan were the next top countries that contributed to a surge in M&A deal value.

Thailand Tightens Rules on Crypto Advertising

Crypto companies in Thailand advertise heavily on digital media and billboards promoting the industry can also be seen throughout Bangkok.

How long can the Bank of Thailand stay dovish?

The BOT is one of the few major Asian central banks to have kept rates at record lows since the pandemic began, but it recently signaled a policy shift as inflation surged to a near 14-year high in May.