By CentralBankNews.info
Thailand’s central bank maintained its policy rate at 2.0 percent, as expected, saying the current stance “remains appropriate in supporting economic recovery” and consistent with long-term financial stability that complements the government’s efforts to lift the economy’s growth potential.
It was the second monetary unanimous policy decision by The Bank of Thailand (BOT) since the coup by the Thai army on May 22 and economists had expected rates to remain on hold as the economy appears to be slowly healing after many months of political and civil unrest.
“The Thai economy showed signs of improvements in the second quarter of 2014, from private spending following the political resolution,” the BOT said, adding that exports are recovering modestly while public spending was slightly short of expectation.
Last month the Thai finance ministry said the economy expanded by 0.2 percent in the second quarter from the first quarter but was still down by 0.3 percent on an annual basis. Official second quarter data are first due on Aug. 18 by the government’s economic planning agency.
In the first quarter, the Thai Gross Domestic Product contracted by 2.1 percent from the fourth quarter for an annual decline of 0.6 percent, down from growth of 0.6 percent in the previous quarter.
In the second half of the year, the BOT said firmer domestic demand and public investment should lend further impetus to economic recovery with exports and tourism expected to expand at a subdued pace while inflationary pressures remain contained.
Thailand’s headline inflation rate eased to 2.16 percent in July from 2.35 percent in June and core inflation rose to 1.81 percent from 1.71 percent. The BOT targets core inflation of 0.5 to 3.0 percent and in March forecast core inflation in 2014 of 2.5 percent and headline inflation of 1.5 percent.