On Wednesday, the Bank of Thailand revealed in its April 10 monetary policy meeting minutes that private consumption and tourism are expected to underpin higher growth in Thailand’s economy in 2024 compared to 2023. However, despite these expectations, there are still some uncertainties.
For the third consecutive meeting, the monetary policy committee decided to maintain the one-day repurchase rate (THCBIR=ECI) at 2.50%, the highest level in over ten years. The decision was made by a vote of 5-2. Two participants supported a quarter-point cut.
The next rate review is on June 12.
“Most Committee members deem that the policy rate remains consistent with sustaining growth while fostering macro-financial stability in the longer term,” according to the minutes.
“Nevertheless, uncertainties on the Thai economy remain high, particularly from export recovery, government budget disbursement, and fiscal stimulus measures.”
The BOT revised its estimate of 2.5%–3.0% GDP growth in 2024 to 2.6% during the meeting.
This year, the government anticipates growth of 4%.
As the finance minister and prime minister, Srettha Thavisin has publicly criticized the central bank’s monetary policy. He repeatedly stated that rate reductions would assist the economy in adjusting to high household debt and China’s recession.
He urged leading commercial banks to cut their rates this week in an effort to support the economy and small companies.
The second-biggest economy in Southeast Asia unexpectedly contracted by 0.6% from the third quarter of 2023 to the fourth. Full-year growth was 1.9%, which was less than the 2.5% growth in 2022 and slower than anticipated.
Approved by the cabinet this week, the government’s major stimulus plan worth 500 billion baht ($13.5 billion) is set to debut in the fourth quarter. According to a government official, it would boost economic growth by 1.2 to 1.8 percentage points by 2025.
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