MPC Meeting, February 3, 2021: Policy Rate Likely to Remain Unchanged at 0.5% and Close Attention Must be Paid to New Economic Assessment Results to be Released in March (Business Brief No.3911)

• KResearch assesses that the Monetary Policy Committee (MPC) may keep its policy rate steady at 0.50 percent during its first meeting of 2021, scheduled for February 3, because the government has just implemented new monetary and fiscal measures. Its spending under the new fiscal stimulus package accounts for 1.4 percent of GDP, which will likely help alleviate the impacts of the new wave of COVID-19 on the economy somewhat. In addition, the Baht's slow appreciation may help ease concerns over its impacts on the economy, as well.  
  
• However, close attention must be paid to the MPC's new assessment results of the Thai economy to be released in March 2021 and additional monetary and fiscal measures, aimed at alleviating the impacts of the new wave of COVID-19 on the Thai economy. The economic assessment for the remainder of 2021 may hinge on additional stimulus measures to be introduced by the govement aside those schduled for implementation in March 2021. Additionally, it will depend on the MPC's views on the COVID-19 situation at home and abroad, availability of COVID-19 vaccines (being a positive factor) and the government's decision to allow more foreign tourists to enter Thailand. If the results of the Thai GDP revision in March are significantly lower than those reported in December 2020, the MPC may likely cut its policy rate by another 0.25 percent.​
  

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