MNI BRIEF: Thai CB Downgrades Growth, Rates On Hold

Thailand’s central bank has downgraded its growth forecasts but maintained a benign view of inflation as it left interest rates on hold at the latest policy review on Wednesday.

The Bank of Thailand, as expected, left its one day repurchase rate unchanged at the record low of 0.50% in a unanimous decision by the Monetary Policy Committee, see: MNI STATE OF PLAY: Thai CB Faces Lower Growth, High Inflation.

Although the BoT cited improving domestic demand and tourism, the 2022 growth forecast was downgraded slightly to 3.2% against 3.4% previously. The forecast for 2023 is now 4.5% against the previous 4.7%. On inflation, the bank sees it exceeding 5% in the second and third quarters of this year driven by energy prices but is forecasting a fall and a return to the 1% to 3 % target in 2023 because it does not believe that high energy prices will persist.