The Bank of Thailand (BoT)’s Monetary Policy Committee (MPC) voted unanimously to raise the policy rate by 0.25 percentage point from 2.25 to 2.50 percent, effective immediately, announced Mr. Piti Disyatat, MPC’s Secretary.
The Thai economy overall continued to recover in 2023, albeit at a slower pace due to soft external demand. Growth should pick up in 2024, supported by both domestic and global demand.
Inflation is projected to increase next year in line with the recovery and El Niño-related supply pressure.
The Committee is monitoring additional impetus to growth and inflation from government economic policies. In the context of continuing expansion and narrowing slack, monetary policy should aim to keep inflation sustainably within the target range, foster long-term macro-financial stability, and ensure sufficient policy space given uncertain outlook.
The Committee thus voted to raise the policy rate by 0.25 percentage point at this meeting, said the BoT in its statement.
The Committee projects growth to be 2.8 and 4.4 percent in 2023 and 2024, respectively, driven by private consumption. Growth this year softened somewhat from a delayed recovery in merchandise exports and tourism, weighed by subdued growth in China and the global electronic cycle.
Growth should however pick up in 2024 from domestic demand, underpinned by a steady tourism recovery and a turnaround in merchandise exports, with additional support from government policies. (TNA)
