Mr. Thitinan Mallikamas, Assistant Governor of the Monetary Policy Group and Secretary of the Monetary Policy Committee (MPC), revealed that the MPC meeting on March 20, 2019, unanimously decided 7 to 0 to maintain the policy interest rate at 1.75% per annum. At the same time, the economic growth rate (GDP) forecast for 2019 was revised down to 3.8% from the previous estimate of 4%. For 2020, GDP is expected to grow by 3.9%. The export growth forecast for 2019 was also revised down to 3% from 3.8%, while for 2020, exports are expected to grow by 4.1%. Imports in 2019 are expected to grow by 3.1% and increase to 4.8% in 2020.

          “The reason for maintaining the interest rate at 1.75% is due to the Thai economy showing signs of growth close to its potential, even though it has slowed down more than previously estimated due to declining external demand. Domestic demand continues to grow. General inflation is trending close to the estimated levels. The MPC believes that the current accommodative monetary policy supports economic growth and aligns with the inflation target framework, coupled with the increasing uncertainties in the global economy and domestic factors,” Mr. Thitinan stated.


          The downward adjustment of the Thai economic forecast is primarily due to export factors as well as domestic factors, which need to be considered on a case-by-case basis in each meeting. However, the overall Thai economy is expected to continue growing close to its potential, driven by domestic demand. Private consumption is expected to grow continuously, supported by improved household income both in and outside the agricultural sector, which is partly bolstered by government measures, although there are still pressures from high household debt levels. 


          The MPC will monitor external risks, including trade barriers, the growth trend of the Chinese economy, and the economies of major industrial countries that will affect domestic demand. Additionally, they will keep an eye on the progress of infrastructure investments and private sector investments, which will impact future economic growth trends. They will also track developments in the housing loan market, adjustments in the real estate sector, the expansion of cooperative assets, and the rising trend of household debt, as well as large businesses that may underestimate risks.

 

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