The MPC unanimously decided to raise the policy rate by 0.25% per annum from 1.00% to 1.25% per annum, with immediate effect.
Today (November 30, 2022), Mr Piti Disyathat, Secretary of the Monetary Policy Committee (MPC), announced the results of the MPC meeting on November 30, 2022, stating
Thailand’s economy tends to continue to improve. The tourism sector and private consumption will continue to be important drivers of the economy going forward. and to mitigate the effects of the global economic slowdown.
Headline inflation in 2023 is likely to be higher than previously estimated mainly from domestic energy prices. but will continue to decline and return to the target range in 2023
The Committee was of the opinion that the gradual increase in the policy rate is still a guide for implementing policy in line with the prospects for economic recovery and inflation. Therefore, the policy rate should be raised by 0.25 per cent per annum at this meeting.
Thailand’s economy is expected to expand continuously at 3.2, 3.7 and 3.9 percent in 2022, 2023 and 2024, respectively.
In addition, private consumption was supported by economic activities, including improved and more widely distributed employment and labor income. The tourism sector and private consumption will continue to be important drivers in 2023 and 2024.
Although the global economic slowdown has caused the export sector to expand less As a result, the trend of general economic recovery remains similar.
However, we still need to keep an eye on global economic trends which are extremely uncertain and could slow down more than expected. and the continued recovery of the tourism sector
Headline inflation is expected to be 6.3, 3.0 and 2.1 per cent in 2022, 2023 and 2024, respectively, peaking in the third quarter of 2022.
For 2023, headline inflation is expected to increase compared to the previous projection mainly due to the increase in electricity prices. But it will still tend to return to the target frame by the end of the year.
Although core inflation tends to be close to the assessment. which will gradually decrease to 2.6, 2.5 and 2.0 percent in 2022, 2023 and 2024, respectively.
Meanwhile, medium-term inflation expectations were anchored within the target range, but inflation risks still need to be carefully monitored. especially transferring costs that could increase and adjust energy prices in countries that are still uncertain.
The overall financial system is stable. Commercial banks have strong capital and reserve levels. The debt serviceability of businesses and households generally improved in line with the economic recovery. However, the financial situation of some small and medium businesses, entrepreneurs and households is still fragile as income has not fully recovered. This will make them more vulnerable to rising living costs and debt.
The Committee was of the opinion that steps should be taken to continuously restructure debts. including the importance of having specific measures and sustainable solutions to debt problems for vulnerable groups
The general financial conditions remained acceptable. Private borrowing costs gradually increased in line with the policy interest rate. but generally still favorable to raising money The amount of credit and funding in the bond market continued to expand.
Regarding the exchange rate of the baht against the dollar The volatility of the US dollar was mainly due to the direction of the economic and monetary policy of major economies, and the Committee would carefully monitor developments in the financial markets and the volatility of the exchange rate.
under a monetary policy framework aimed at maintaining price stability. together with looking after the economy to grow sustainably and reach its full potential and maintain financial stability
The Committee assessed that the Thai economy is likely to continue to recover. But there are risks of inflation that must be monitored. Therefore, it is considered appropriate to gradually raise the policy interest rate to a level suitable for long-term stable economic growth.
under increasing global economic and financial uncertainty going forward. If the outlook for the Thai economy and inflation deviates from the assessment, the Committee is prepared to adjust the size and timing of future policy rate increases.
