Thai central bank minutes show economy expanding, uncertainty remains

By Reuters   April 23, 2024 | 07:57 pm PT
Thai central bank minutes show economy expanding, uncertainty remains
A view of the business district is seen from the rooftop of the Baiyoke Sky Hotel in Bangkok, Thailand on April 29, 2020. Photo by Reuters
Thailand's economy is projected to grow at a faster pace in 2024 than 2023 supported by private consumption and tourism, but uncertainties remain, minutes, opens new tab of the Bank of Thailand's April 10 monetary policy meeting showed on Wednesday.

At the meeting, the monetary policy committee voted 5-2 to hold the one-day repurchase rate, opens new tab steady at 2.50%, the highest in more than a decade, for a third straight meeting. Two members favoured 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, " the minutes said.

"Nevertheless, uncertainties on the Thai economy remain high, particularly from export recovery, government budget disbursement, and fiscal stimulus measures."

At the meeting, the BOT adjusted its 2024 economic growth forecast to 2.6% from a previous projection of 2.5%-3.0%.

The government projects 4% growth this year.

Prime Minister Srettha Thavisin, who is also the finance minister, has openly challenged the central bank over its monetary policy, repeatedly saying rate cuts would help the economy cope with high household debt and China's slowdown.

This week, he asked top commercial banks to lower their rates to help small businesses and the economy.
Southeast Asia's second-largest economy unexpectedly shrank 0.6% in the final quarter of 2023 from the third. Full-year growth came in at 1.9%, slower than expected and below 2.5% growth in 2022.

The government's flagship 500 billion baht ($13.5 billion) digital wallet stimulus scheme received cabinet approval this week and is slated to be launched in the fourth quarter. A government official said it would add 1.2 to 1.8 percentage points to economic growth in 2025.

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