The Bank of Thailand’s Monetary Policy Committee (MPC) today agreed to maintain its policy rate unchanged at 2.00 per cent, in line with market expectations.
MPC secretary Paiboon Kittisrikangwan, announced that the Thai economy contracted in the first quarter of 2014 as political uncertainties weighed on domestic demand and tourism.
Moderate recovery in exports of goods could not compensate for falling domestic consumer demand. Following a significant reduction of political uncertainties, the economy should benefit from improving public and private spending.
A slow recovery in exports of goods and tourism however pose downside risks to growth. Meanwhile, inflationary pressure has edged higher.
The committee viewed that the economic recovery should pick up pace given reduced political uncertainties and a resumption of functioning public policy management.
More active fiscal policy and prevailing monetary policy accommodation should lend support to a sustained economic recovery.
He said, the committee thus voted unanimously to maintain the policy rate at 2.00 per cent per annum.
The MPC will closely monitor economic and financial developments, and will pursue appropriate policies to ensure a sustained recovery as well as long‐term financial stability.
