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%.