Thai economy bottomed out in Q3 -central bank minutes

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FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva/File Photo

 

BANGKOK (Reuters) - Thailand's economy bottomed out in the third quarter of this year and will continue to recover though uncertainty remains high, showed minutes of the central bank's last policy meeting released on Wednesday.

 

As the Southeast Asian country deals with its worst coronavius outbreak, pent-up demand is expected to support the economic recovery throughout 2021, following progress on vaccination and an earlier-than-expected relaxation of containment measures, the minutes showed.

 

On Sept. 29, the Bank of Thailand's monetary policy committee unanimously voted to keep the benchmark interest rate unchanged at a record low of 0.50% for an 11th consecutive meeting.

 

The BOT next reviews monetary policy on Nov. 10, and analysts expect no rate change for the rest of the year.

 

The committee viewed that financial measures would be more effective than a further reduction in the already-low policy rate, the minutes showed.

 

Fiscal policy is the main driver of the recovery, while monetary policy must contribute to accommodative financial conditions, the minutes showed.

 

At the meeting, the BOT maintained its 2021 economic growth forecast at 0.7% but slightly raised its 2022 outlook to 3.9% growth from 3.7% projected in August.

 

The central bank will closely monitor the baht and ensure its movement does not hinder business and will expedite a new foreign exchange ecosystem, the minutes showed.

 

(Reporting by Orathai Sriring; Editing by Martin Petty)

 

-- © Copyright Reuters 2021-10-14

 

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[ThailandRyan]

Do they even know where the bottom of the market is, when monetary issues hit and prices start to rise we have whats called inflation.  Already seeing telltale signs of it occurring.  Food prices and fuel are going up as well as prices on clothing.

[ezzra]

Yes will continue to recover on the back of incoming tourism and what ever cash they can milk them for already this B500 levy per tourist is penciled in from next year and it's only the start...

[fredscats]

Will stay bottomed out in Q4 5 6 7 if there where any, and forever

[StayinThailand2much]

22 minutes ago, ThailandRyan said:

Do they even know where the bottom of the market is, when monetary issues hit and prices start to rise we have whats called inflation.  Already seeing telltale signs of it occurring.  Food prices and fuel are going up as well as prices on clothing.

Maybe they misinterpreted rising inflation as a sign of economic recovery. I wouldn't be surprised if there was no Thai word for 'stagflation'...

Edited October 14, 2021 by StayinThailand2much

[JonnyF]

I wonder how they know it has bottomed out. There are plenty of factors that could take Thailand's economy down further, especially with the current "government".

[RafPinto]

BOE soon raising interest rates to beat inflation.

Inflation in many countries now well above 5%

[brommers]

Lmfao. How can they say it has bottomed when the 4th quater has hardly started. Thailand is export and tourism dependant and neither of these will see any meaningful improvement this year.

[2 is 1]

4 minutes ago, brommers said:

Lmfao. How can they say it has bottomed when the 4th quater has hardly started. Thailand is export and tourism dependant and neither of these will see any meaningful improvement this year.

If they not "keep" BTH so strong they will get export industry way up! Also that may help to attract tourist to come in country! But what i know im not economist!

[klauskunkel]

I think there is still a cellar on that bottom...

[RichardColeman]

I wonder if this is what is now forcing Thailand to open up quicker.

 

Last year their economy had one QTR of tourism, this year they are really trying to save some Q4 tourism - which wont work due to demands - to replace last years numbers. Without that Q of tourism Thailand is going nowhere economically this year other than backwards.

 

Basically, whilst the rest of the world is now in growth, Thailand is still in stagnation

[Eric Loh]

5 hours ago, RafPinto said:

BOE soon raising interest rates to beat inflation.

Inflation in many countries now well above 5%

Asia central banks are seemingly hawish over fear of inflation. South Korea raised their interest rate recently followed by Singapore's tightening monetary policy today. Even BOT is split on whether they should raise rate at their recent sitting. Wouldn't be suprised that BOT will raise rate next sitting to combat imported inflation from a weak Baht.