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.