Issue |
Previous meeting
(16 Aug 2017)
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This meeting
(27 Sep 2017)
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Thai economy |
Thailand’s economic growth gained further traction on account of stronger growth in merchandise exports across various product categories and destinations, continued expansion in tourism, and higher agricultural output. Meanwhile, private consumption continued to expand at a gradual pace. Private investment was projected to expand slowly, while construction investment moderated. Public investment growth was softer than previously assessed. The improved growth outlook was still subject to external risks, such as trading partners’ growth outlook, uncertainties pertaining to US economic and foreign trade policies, and geopolitical risks.
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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.
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Inflation Conditions |
Headline inflation increased at a slightly slower pace than previously assessed. This was due to the fall in raw food prices following higher agricultural output and favorable climate, as well as the base effect of last year’s drought. Meanwhile, core inflation was projected to improve gradually throughout the second half of the year. |
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
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Key risk factors |
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
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1. U.S. economic and foreign trade policies
2. Geopolitical risks
3. Debt serviceability of SMEs
4. Search-for-yield behavior
5. Monetary policy of major advanced economies
Immigrant workers situation
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Policy interest rate |
Unanimously voted to main policy rate at 1.50% |
Unanimous votes to maintain the policy rate at 1.50%. |
Policy deliberations |
Monetary policy should remain accommodative. Economic growth was firmer but domestic demand recovery still concentrated in certain sectors. |
Monetary policy should remain accommodative. Economic growth was stronger but domestic demand recovery remained gradual and was concentrated in certain sectors. |