Thai growth improves but domestic demand not strong enough: minutes

[BANGKOK] Thailand's economy gained further traction on external demand but domestic demand was not"sufficiently strong", and monetary policy has to remain accommodative to boost activity, minutes of the central bank's last policy meeting showed on Wednesday.

On Feb 14, the Bank of Thailand's (BOT) policy committee voted unanimously to keep the one-day repurchase rate at 1.50 per cent, where it has been since April 2015.

"The committee viewed that an accommodative monetary policy stance was still necessary for some period to foster stronger domestic demand," the minutes said.

Some MPC members felt Thai economic expansion was still "at the initial stage" and facing structural changes, the minutes said.

Household debt serviceability remained an issue, especially among low-income earners, while growth in private consumption needs to be closely monitored, especially after the government's 2018 supplementary budget is spent, they said.

Public investment, which had slowed in the recent period, would remain a key growth driver and was expected to resume expansion, the minutes said.

For this year, the central bank has forecast economic growth of 3.9 per cent, the same as in 2017, the fastest pace in five years. It will review that projection on March 28, at its next policy meeting.

Most economists expect no policy change for the rest of 2018, while some predict rate increases in the second half of the year.

REUTERS