Central bank cuts growth projection to 2.8 percent but retains policy rate at 1.5 percent
The Bank of Thailand has slashed the country’s economic growth projection for this year to 2.8% from 3.3% and the projection for next year from 3.7 % to 3.3%.
The Monetary Policy Committee of the central bank, meanwhile, unanimously agreed today (Wednesday) to retain the policy interest rate at 1.5%.
Mr. Thitanan, secretary of the committee, explained the decision not to revise the policy rate, saying that the committee assessed that the economic growth rate will be below projections as a result of export contraction, trade tensions and, a global economic slowdown.
He said that the country’s economy was also weighed down by the high level of household debt, natural disasters and a reduction in private sector investment.
Mr. Thitanan said that this year, Thai exports will drop 1% year-on-year and are expected to increase by 1.7% next year, against the original forecast of 4.3%.
Imports this year are forecast to drop by 3.6% this year, against the original projection of 0.3%, but are expected to recover to 3.5%, against the original projection of 4.8%.