Thai Central Bank Holds Key Rate At Record Low, Raises 2022 GDP Outlook

Thailand's central bank left its key interest rate unchanged at a record low again on Wednesday, despite surging inflation, and raised slightly its 2022 growth forecast for the pandemic-hit economy.

The Bank of Thailand (BOT) raised its forecast for inflation this year and said it would remain elevated for longer than expected and that any rate hike decision by the central bank would be in line with the state of the economy and inflation.

The BOT's monetary policy committee voted 4-3 to hold the one-day repurchase rate at an all-time low of 0.50%, where it has been since May 2020, for a 16th straight meeting. [LUN2V2012]

The decision had been predicted by all 20 economists in a Reuters poll.

"The committee deems that a very accommodative monetary policy will be less needed going forward," the BOT said in a statement https://www.bot.or.th/English/PressandSpeeches/Press/2022/Pages/n3165.aspx after its policy meeting.

"However, to ensure that the recovery will continue to gain traction as anticipated, most members voted to maintain the policy rate in this meeting and will reassess the risks to growth and inflation going forward."

The BOT forecast economic growth of 3.3% for 2022, up from the previous forecast for 3.2% growth.

It now sees 2023 gross domestic product up 4.2%, compared with its earlier forecast of 4.4%.

The central bank expects 2022 year-average headline consumer prices to be 6.2% higher than last year, versus the 4.9% rise seen previously. For 2023, it sees a rise of 2.5%, compared with a previous forecast of 1.7%.

The BOT raised its forecast for foreign tourist arrivals for this year to 6 million, from 5.6 million previously projected. It predicts 19 million foreign tourist arrivals in 2023, matching its earlier estimate.

It raised its 2022 forecast for export growth to 7.9%, versus a 7.0% increase seen earlier, and predicted exports would rise 2.1% next year, rather than the 1.5% seen earlier.