Many economists expected the Bank of Thailand (BOT) to cut its benchmark interest rate to a new lowest level at its policy review on Wednesday.
16 out of 18 economists on a poll held by Reuters expected the central bank’s monetary policy committee to cut its one-day repurchase rate by 25 bp to 0.50%. If realized, the cut would be the fifth reduction since August last year.
The prediction followed Monday’s report on Thailand’s economy contracting by 1.8% year-on-year in the first quarter, and 2.2% quarter-to-quarter. Social restriction to limit the spread of coronavirus has damaged the country’s tourism and domestic activity.
However, some analysts also thought that the policymakers might want to wait for the result of the previous steps in mitigating the impact of the virus.
Going forward, the National Economic and Social Development Council (NESDC), the compiler of the gross domestic product (GDP) data, cut its 2020 GDP outlook to a 5.0-6.0% contraction. Previously, NESDC estimated growth between 1.5-2.5% of GDP.
Exports are likely to fall by 8%.
