Author: Pimnipa Booasang
EIC expects the MPC to maintain policy rate throughout the year.
Press release by Bank of Thailand (this meeting compared to the previous meeting)
(16 Aug 2017)
(27 Sep 2017)
The Thai economy gained further traction on account of stronger growth in merchandise exports and tourism. Private consumption continued to expand on the back of services and durable goods. Nonetheless, overall private consumption gradually expanded as household purchasing power was not sufficiently strong, particularly low-income households. Private investment in machinery and equipment picked up across various sectors. Meanwhile, public investment remained an important growth driver. The improved growth outlook was still subject to both domestic and external risks, such as impacts from regulations on immigrant workers, uncertainties pertaining to US economic and foreign trade policies, and geopolitical risks.
Headline inflation increased at a slower pace than the previous assessment. This was due primarily to the decline in fresh food prices as a result of higher output of vegetable and fruits. Nevertheless, headline inflation was projected to slowly rise from the recovery in domestic demand, an increase in excise tax, and regulations on immigrant workers that might affect wages going forward
1. U.S. economic and foreign trade policies
2. Trading partners’ economic outlook
3. Debt serviceability of SMEs
4. Search-for-yield behavior
5. Stronger baht against regional currencies that may affect business adjustments
2. Geopolitical risks
5. Monetary policy of major advanced economies
Immigrant workers situation