Statement by the Bank of Thailand:
The global economy continued to recover since the last meeting. G3 economies showed signs of gradual improvement, led by the US economy which expanded on the back of stronger domestic demand. The Chinese economy expanded steadily, while exports of Asian economies, particularly in North Asia, began to recover at a gradual pace.
The Thai economy in the fourth quarter of 2013 is expected to grow less than previously assessed as a result of soft domestic demand, leading to lower-than-expected growth for 2013. The ongoing political situation continued to dent private confidence, weighing on overall outlook for growth. Exports expanded at a subdued pace, despite signs of recovery in some sectors.
The committee deems the current stance of monetary policy to be accommodative and appropriately supportive of economic recovery. The ongoing political situation poses risks to growth, but sound economic fundamentals should help the economy weather these short-term risks. In addition, safeguarding financial stability remains a cornerstone for economic recovery in the period ahead. The MPC thus voted 4 to 3 to maintain the policy rate at 2.25 percent per annum.
Three members voted to reduce the policy rate by 0.25 percent to cushion the economy against rising downside risks to growth, given contained inflationary pressure.