The Bank of Thailand’s Monetary Policy Committee voted 4 to 2 to maintain the policy rate at 0.50 percent in the meeting on Wednesday.
The Committee assessed that the Thai economy in 2021 would be affected by the COVID-19 outbreak more than expected with significant downside risks, it said in the statement.
The most important issue for the Thai economy at present was to accelerate containment of the outbreak and distribution of vaccines to restore confidence and support the recovery in economic activities and income.
Fiscal and financial measures must be expedited to assist affected groups in a more targeted and timely manner in line with the current situation. The Committee viewed that risks to the economic outlook remained high. The support must be provided by accelerating the distribution of liquidity and reduce debt burden for those who were affected.
The Thai economy was projected to expand 0.7 and 3.7 percent in 2021 and 2022 respectively. This would be lower than the previous projection due to private consumption which was greatly affected this year and foreign tourist figures which were expected to be significantly lower next year.
The labor market would be more fragile, particularly the services sector and the self-employed. However, the economy would be supported by higher public expenditure thanks to the Emergency Decree Authorizing the Ministry of Finance to Raise Additional Loans to Solve Economic and Social problems as Affected by the Coronavirus Disease Pandemic, B.E. 2564 (2021).
The support would also come from the improving merchandise exports, although parts of the manufacturing sector were affected by the outbreak in factories and temporary shortages in raw material. (TNA)
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