Central Bank Meeting Minutes: Uncertainties Remains High for the Thai Economy

Thai economy bottomed out in the third quarter of the 2021 and would continue to recover amid high uncertainties that remains high, according to meeting minutes of Bank of Thailand’s (BOT) latest policy meeting.

BOT maintains its August projection of economic growth of 0.7% and 3.9% in 2021 and 2022 respectively.

The meeting minutes notes headwinds for the Thai economy would be recurring outbreaks which could affect the private sector’s confidence and delay consumption recovery. The note added bottlenecked global supply chain disruption could alternatively affect export growth.

Recovery would be uneven across sectors which could further worsen the fragile labor market adding to unemployment.

According to the monetary committee, although the monetary policy support is necessary, fiscal policy is the key driver for economic recovery.

The raising of public debt ceiling to 70% of GDP would allow the government flexibility on policy support.

The committee believes financial measure would be more effective than a further reduction in the policy rate which is already low. thus expected to maintain 0.5% policy rate.

The next monetary policy meeting is on November 10 and policy rate is expected to be maintained at 0.5%.