Thailand’s economy bottomed out in the third quarter of this year and will continue to recover, although uncertainty remains high, based on the minutes of the central bank’s last policy meeting released on Wednesday.
Pent-up demand is expected to support the economic recovery throughout 2021, following progress in Covid-19 vaccinations and an earlier-than-expected relaxation of containment measures, the minutes showed.
On Sept 29, the Bank of Thailand’s monetary policy committee unanimously voted to keep the benchmark interest rate unchanged at a record low of 0.50% for an 11th consecutive meeting.
The BoT next reviews monetary policy on Nov 10 and analysts expect no rate change for the rest of the year.
The committee was of the view that financial measures would be more effective than a further reduction in the already-low policy rate, the minutes showed. Fiscal policy is the main driver of the recovery, while monetary policy must contribute to accommodative financial conditions,the minutes showed.
At the meeting, the BoT maintained its 2021 economic growth forecast at 0.7% but slightly raised its 2022 outlook to 3.9% growth from 3.7% projected in August.
The central bank will closely monitor the baht and ensure its movement does not hinder business and will expedite a new foreign exchange ecosystem, the minutes showed.