Bank of Thailand Reiterates Confidence in Economic Recovery Amid Lingering Uncertainties

The Thai economy is predicted to grow in the latter part of the year, according to the minutes from the Bank of Thailand’s monetary policy meeting on June 12.

The central bank affirmed that the existing policy rate is in line with the expected rates of growth and inflation. The monetary policy committee, in a 6-1 vote during the meeting, decided to keep the one-day repurchase rate unchanged at 2.50% for a fourth consecutive meeting, while one member pushed for a quarter-point decrease.

The Thai policy committee expressed concerns regarding the K-shaped economic recovery, highlighting the maintained stable and supportive financial conditions for growth recovery. They adopted a cautious approach towards macro-financial stability and emphasized that the current policy interest rate aligns with the growth and inflation outlook.

Despite the anticipated expansion of the Thai economy in the latter half of the year, uncertainties persist, with risks becoming less tilted to the downside.

The economy is expected to be primarily driven by domestic demand and tourism, with signs of recovery in exports. Medium-term inflation expectations remain consistent with the target, and the current inflation target range continues to be effective. While industrial manufacturing is displaying indications of reaching a bottom, the recovery remains uneven.