MPC Votes Unanimously to Maintain Policy Rate at 1.75%, Seeing Slower Economic Growth
On May 8, 2019, the Monetary Policy Committee has voted unanimously to keep the policy rate unchanged at 1.75%, seeing slower economic growth.
On May 8, 2019, the Monetary Policy Committee has voted unanimously to keep the policy rate unchanged at 1.75%, seeing slower economic growth.
8 พ.ค. 2562

On May 8, 2019, the Monetary Policy Committee has voted unanimously to keep the policy rate unchanged at 1.75%, viewing economic growth slower than expected.
 
In deliberating their policy decision, the Committee assessed that the Thai economy would expand at a slower pace than the previous assessment. Inflation was projected to be around the lower bound of the inflation target. Overall financial conditions remained accommodative and conducive to economic growth.
However, there were risks to financial stability in the future that warranted continued monitoring. The Committee viewed that the current accommodative monetary policy stance had contributed to the continuation of economic growth and was appropriate given the inflation target.
In addition, global economic and domestic uncertainties would remain high in the period ahead. The Committee thus voted to keep the policy rate unchanged at this meeting to assess the clarity of impacts from such uncertainties.
 
The Thai economy was expected to expand at a slower pace than previously assessed owing to merchandise exports and investment. Merchandise exports would grow at a slower pace than previously assessed due to the global economic slowdown, a down cycle of electronic products as well as impacts from trade protectionist measures between the US and China. Tourism would continue to gain traction.
Regarding domestic demand, private consumption was expected to continue expanding. Nevertheless, private consumption was restrained by elevated household debt and the overall employment that started to flatten out, with signs of moderation in employment in the construction and export-related manufacturing sectors.
Private investment was expected to expand at a slower pace. However, the relocation of production base to Thailand and public-private partnership projects for infrastructure investment would support investment in the period ahead. Meanwhile, the public expenditure would grow at a slower pace than previously assessed, which was partly due to delays in some public investment projects.
The Committee would monitor external risks from both trade protectionist measures between the US and China, as well as the economic outlook of China and advanced economies, which could affect domestic demand. Furthermore, the Committee would monitor domestic uncertainties, including policy implementation of the new government and public expenditure, as well as the progress of major infrastructure investment and its knock-on effects on private investment, which could affect the momentum of economic growth in the period ahead.