The Thai economy is growing as the policy rate gets closer to a stable level

The Thai economy is growing as the policy rate gets closer to a stable level

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The policy rate is getting closer to a number that is stable over the long term. The minutes of the central bank’s monetary policy meeting on August 2 showed that the economy should continue to grow.

Due to a delay in the planning process, public spending and investment were expected to go down from a year ago, but they were expected to go back up in 2024.

On August 2, the policy committee of the Bank of Thailand decided unanimously to raise the one-day repurchase rate by a quarter point, to 2.25 percent. They did this because inflation risks still existed.

“The committee thinks the economy will grow toward its potential level, mostly because of tourism and private consumption,” the minutes said. They also said that exports, which had dropped in the short term, should rise again as the global economy picks up speed.

The group thinks that export delays, the effects of El Nio, and political uncertainty at home could all hurt growth.

Thailand has had a caretaker government for five months because the Move Forward party, which won the poll, has not been able to form a government.

The BOT will look at the rate again on September 27. Some economists believe that there will be no change in policy, which would mean the end of the tightening cycle.

Since August of last year, the BOT has raised the key rate by 175 basis points.

“Monetary policy should keep inflation sustainably within the target range and promote longer-term macro-financial stability by stopping the buildup of financial imbalances,” the minutes said.