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Thailand's central bank keeps its benchmark interest rate at a record low and improves its GDP forecast for 2022

Image: Reuters Berita 24 English -  Despite rising inflation, Thailand 's central bank kept its benchmark interest rate unchanged at a ...

Image: Reuters

Berita 24 English -  Despite rising inflation, Thailand's central bank kept its benchmark interest rate unchanged at a record low on Wednesday, and upped its growth estimate for the pandemic-hit economy marginally to 2022.

The Bank of Thailand (BOT) revised its inflation prediction for this year, predicting that it would remain high for longer than expected, and that any rate hike decision by the central bank would be based on the economy's and inflation's situation.

For the 16th meeting in a row, the BOT's monetary policy committee voted 4-3 to keep the one-day repurchase rate at an all-time low of 0.50 percent, where it has stood since May 2020. 

In a Reuters poll, all 20 economists expected that the decision would be made.

The BOT noted in a statement that "a very flexible monetary policy will be less needed going forward." following its policy meeting

"However, to ensure that the economy continues to gain pace as expected, the majority of members opted to retain the policy rate at this meeting, and the risks to GDP and inflation will be reassessed going forward."

The BOT predicted a 3.3 percent increase in economic growth in 2022, up from 3.2 percent previously.

It now forecasts a 4.2 percent increase in GDP in 2023, compared to a 4.4 percent increase previously.

The central bank forecasts a 6.2 percent increase in year-average headline consumer prices in 2022, compared to a 4.9 percent increase last year. It is expected to climb 2.5 percent in 2023, compared to 1.7 percent previously predicted.

The BOT increased its prediction for foreign visitor arrivals to 6 million for this year, up from 5.6 million earlier. It forecasts 19 million foreign visitor arrivals in 2023, which is consistent with previous projections.

It increased its export growth prediction for 2022 to 7.9%, up from 7.0 percent previously, and anticipated exports would rise 2.1 percent next year, up from 1.5 percent previously.

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