Thailand's economy requires a coordinated policy mix and structural changes to handle heightened risks from the Middle East war as the outlook dims, minutes of the Bank of Thailand's (BoT) April 29 policy meeting showed on Wednesday.
At the meeting, the central bank's Monetary Policy Committee (MPC) unanimously voted to keep the one-day repurchase rate unchanged at 1.00% as it assessed the impact of higher oil prices driven by the conflict in the Middle East.
Consumption-based stimulus offered only transient economic support, the minutes said, adding that policy should prioritise structural transformation and the preservation of fiscal space.
Overall credit growth was expected to remain subdued this year, the minutes showed.
Last week, Governor Vitai Ratanakorn revised growth forecasts to 2.1% this year and 1.6% for next, from 1.5% and 2.0% previously at the policy review.
The impact of the conflict had gone beyond higher energy prices and had become more broad-based, weakening purchasing power, more business cost, the minutes said.
The upward revision for this year reflects a 400-billion-baht (US$12.4-billion) loan decree approved last week and a consumer subsidy scheme planned for June to boost consumption, Mr Vitai said.
The government this week said it would seek cabinet proposal to borrow an additional 200 billion baht.
Mr Vitai has forecast headline inflation at 3.1% this year, easing to 1.4% in 2027, compared with the central bank’s April projections of 2.9% this year and 1.5% next, and against its 1% to 3% target range.
Southeast Asia's second-largest economy, which has lagged regional peers since the coronavirus 2019 (Covid-19) pandemic, expanded 2.4% last year.
