The Bank of Thailand’s Monetary Policy Committee (MPC) on Wednesday voted unanimously to maintain the policy rate at 0.50 percent, announced Piti Disyatat, MPC Secretary.
The Committee assesses that the Thai economic recovery will remain intact in 2022 and 2023, despite impacts from sanctions against Russia which led to higher energy and commodity prices and a slowdown in external demand.
Average inflation for the full year 2022 will exceed the target range but is expected to decline and return to target in early 2023 with energy and food prices stabilizing.
The Committee assesses that recent increases in inflation have stemmed primarily from cost-push factors, while demand-pull inflationary pressures have remained subdued. The Committee thus voted to maintain the policy rate at this meeting to help facilitate a sustained economic recovery.
The Committee assesses that the Thai economy will continue to grow at the rate of 3.2 percent in 2022 and 4.4 percent in 2023 on the back of improving domestic demand and tourism.
The impact of the Omicron variant outbreak on economic activities is expected to be more contained than previous waves. Sanctions against Russia have pushed the cost of goods higher but will not derail the overall recovery path.
Nonetheless, downside risks to growth remain, including (1) prolonged shortages of raw materials in certain industries and (2) the impact of higher prices on living costs for households and production costs for businesses, particularly toward vulnerable groups. The Committee will closely monitor developments in the abovementioned situations closely. (TNA)
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