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31 Jan 2020

Thai Economy

MPC Meeting, February 5, 2020: Policy Rate Cut Likely Amid New Risks (Business Brief No.3848)

              New risks to the Thai economy have been seen. These include the novel coronavirus outbreak, which will likely hurt tourism receipts and a likelihood that the enforcement of the 2020 Budget Act will be delayed, thus preventing the government to use fiscal tools to fully steer the Thai economy.  In addition, drought is dampening farm income while the government's investment budget is being held up due to the delayed 2050 fiscal budget. 

            Given this, we at KResearch expect that Monetary Policy Committee (MPC) may resolve to cut its policy rate by at least 0.25 percent at the meeting slated for February 5, 2020. If the MPC assesses that there is an urgent need to cut its policy rate further, it may either lower the policy rate by 0.25 percent at the upcoming February meeting and another 0.25 percent at the March meeting or cut the policy​ rate by altogether 0.50 percent from the current 1.25 percent to 0.75 percent p.a.