The Bank of Thailand has announced it will lower its economic growth forecasts for this year and next, a deputy central bank governor said.
Saying it still has monetary policy space to help the economy despite the key interest rate being at a record low.
However, southeast Asia’s second-largest economy is not in a crisis, as the country’s economic fundamentals and banks remain strong, said Deputy Bank of Thailand Governor Mathee Supapongse.
The central bank will review its 2019 and 2020 economic growth forecasts – currently at 2.8% and 3.3%, respectively – at the next monetary policy meeting on Dec 18.
“They will likely come down, but by how much will depend on upcoming economic data,” Mr Mathee told Reuters in an interview.
Last week’s policy rate cut, the second in three months, prompted commercial banks to lower borrowing costs, and Mr Mathee said that should help the economy, purchasing power and inflation.
Although the policy rate is now at a record low of 1.25%, there is still room to help the economy if need be, said Mr Mathee, who is a member of the bank’s policy committee.
“I think it’s not a limitation that we have reached the bottom already,” he said, adding that Thailand had no need to cut the key rate to zero.