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Thai economy faces uncertainty, monetary policy to stay accommodative


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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 central bank said on Monday there was high uncertainty facing the economy and monetary policy would remain accommodative to support a recovery from the country's most prolonged outbreak of the coronavirus.


The Bank of Thailand (BOT) has forecast economic growth of 0.7% this year, bottoming out in the third quarter and growing 3.9% in 2022.


The economy contracted 6.1% last year, with the key tourism sector still struggling.


Thailand's economic recovery may still lag others and "next year, our baseline is that the financial sector and monetary policy must remain supportive," Assistant Governor Piti Disyatat told an analyst meeting.


The BOT has left its policy rate unchanged at a record low of 0.50% since mid-2020 after cutting it three times earlier that year to help the economy. It has since focused on financial and debt relief measures.


The BOT has fully implemented key monetary policy tools, including interest rates and overall financial conditions, Piti said, adding more targeted fiscal and financial measures would be key.


Monetary policy is a blunt tool while financial measures are a facilitator that has fully been supportive, he said, adding low inflation also gave "a degree of freedom to us to remain accommodative, to some extent".


At a separate seminar, Finance minister Arkhom Termpittayapaisith said monetary policy must support fiscal policy and ensure sufficient liquidity in the system, as government stimulus measures will generally increase inflation.


"In a crisis like this, monetary policy must stop doing its job for a while to let fiscal policy work," he said.


The economy next year will be driven by domestic consumption and a vaccine rollout but the labour market remains fragile with an expected 3.4 million unemployed or partially employed by year-end, said senior BOT director Chayawadee Chai-Anant.


Thailand will reopen to more vaccinated foreign visitors next month.


The baht's volatility was in line with regional currencies and the BOT had acted to ensure it would not be an obstacle to economic recovery, said senior BOT director Sakkapop Panyanukul.



-- © Copyright Reuters 2021-10-18


(Reporting by Orathai Sririn, Satawasin Staporncharnchai and Kitiphong Thaichareon; Editing by Martin Petty)

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10 hours ago, spidermike007 said:

truly believe, that 20 or 30 years from now, in tourism industry, business and sociology classes, at the uni level, there will be tours of these hollowed out shells, of huge hotels that were built, and could neither find guests to stay, nor even a market for condo conversions, and ended up abandoned, after buyers could not be found, or owners refused to accept 20% of the land and construction costs, as a sales price. 

Lol it’s possible 

  • Haha 1
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