The Bank of Thailand’s April 10 monetary policy meeting revealed that the country’s economy is projected to grow at a faster rate in 2024 compared to 2023, driven by private consumption and tourism. Despite this positive outlook, uncertainties remain around factors such as export recovery, government budget disbursement, and fiscal stimulus measures.
During the meeting, the monetary policy committee voted 5-2 to keep the one-day repurchase rate steady at 2.50%, which is the highest in over a decade, for the third consecutive meeting. Two members of the committee advocated for a quarter-point cut. The next rate review is scheduled for June 12.
The committee members believe that the current policy rate is appropriate for sustaining growth and fostering macro-financial stability in the long term. However, they acknowledge that uncertainties persist in the Thai economy and emphasize the importance of factors like export recovery and government spending.
The Bank of Thailand revised its 2024 economic growth forecast to 2.6% from an earlier projection of 2.5%-3.0%. In contrast, the government expects a growth rate of 4% for this year. Prime Minister Srettha Thavisin disagrees with the central bank’s monetary policy and has called for rate cuts to address high household debt and China’s economic slowdown impact on Thailand’s economy.
Thailand’s economy unexpectedly contracted by 0.6% in Q4 of 2023, resulting in full-year growth reaching only 1.9%, lower than anticipated earlier.
The government plans to implement a digital wallet stimulus scheme worth BHT $13 billion ($50 billion) in Q4 this year, which is expected to contribute between 1.2% and 1.8 percentage points to economic growth in Q4 next year.
In conclusion, despite positive projections about Thailand’s economy growing faster in Q4 next year due to private consumption and tourism, uncertainties remain about various factors like export recovery, government budget disbursement, and fiscal stimulus measures.