By Central Bank News
The Bank of Thailand kept its policy rate unchanged at 3.0 percent, as expected, but said it would monitor the growing risks to the global economy and take action if warranted.
“Risks to global economy increased relative to the previous meeting, reflecting heightened uncertainty about the future of Greece in the eurozone and banking problems in Spain. As a result, the contraction of the eurozone economy was projected to be more protracted than previously anticipated. This could have repercussions on the US economic recovery as well as Asia, where export growth has moderated in line with the slowdown in China and the global economy,” the central bank of Thailand said in a statement following a meeting of its Monetary Policy Committee.
But the Thai economy recovered faster than expected in the first quarter and domestic demand remained robust. Although price pressures moderated on the back of lower oil and commodity prices, there were still some inflation pressures.
“The MPC assessed that the balance of risks for the Thai economy was skewed towards growth rather than inflation, primarily reflecting heightened global economic risks stemming from the large degree of uncertainty surrounding the economic problems in Europe,” the central bank said.
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