Bangkok. Thailand's economic growth rate, while improved from recent years, is still below "potential" and policy has to remain accommodative to boost domestic demand, minutes of the central bank's last policy meeting showed on Wednesday (03/01).
On Dec. 20, the Bank of Thailand's (BOT) policy committee voted unanimously to keep the one-day repurchase rate at 1.50 percent, where it has been since April 2015.
"While the Thai economy gained further traction, it was still below potential and thus inflationary pressures remained subdued," the minutes said.
The committee viewed that "an accommodative monetary policy stance was still necessary to foster stronger domestic demand".
The MPC raised its forecasts for economic growth in both 2017 and 2018 to 3.9 percent, from 3.8 percent. In 2016, growth in Southeast Asia second-largest economy was 3.2 percent.
The MPC viewed that risks to the growth projection were deemed "balanced" and growth could be higher than expected, thanks to stronger growth in trading partners' economies and public infrastructure spending, which could be implemented faster than expected.
The MPC next reviews monetary policy on Feb. 14. Most economists expect no policy change throughout 2018 while some predict a rate increase in the second half.