The Bank of Thailand (BoT) has revealed that Thailand’s economy faces significant downside risks, because a prolonged COVID-19 outbreak could cause the economy to underperform the baseline projection, squeezing business liquidity and slowing employment.
Minutes from the BoT’s meeting on Wednesday say the recurring outbreaks have increased labor market fragility and recovery will be W-shaped and slower than in the past. The BoT’s Monetary Policy Committee stands ready to use the limited policy space at the most effective time.
At the meeting, the central bank cut its 2021 economic growth forecast to 1.8%, from 3.0%, and its 2022 outlook to 3.9%, from 4.7%.
The minutes also said the committee will ensure that exchange rate movements will not hinder economic recovery.
The impact of the US monetary policy outlook, on domestic long-term government bond and equity prices, will be limited…
