BANGKOK- Thailand’s outbreak of the Omicron coronavirus variant could have a larger and more prolonged impact than expected on an economic recovery, according to minutes of the central bank’s last policy meeting released on Wednesday.
Although, under the baseline scenario, the Omicron outbreak would not derail the overall Thai economic recovery, the outbreak situation remained highly uncertain, said the minutes.
On Dec. 22, the Bank of Thailand’s monetary policy committee unanimously voted to keep the benchmark interest rate at a record low of 0.50 percent for a 13th consecutive meeting to support the economic recovery.
“The spread of the Omicron variant was a key risk that could hinder the economic recovery going forward, and thus warranted close monitoring,” said the minutes.
The Southeast Asian country has recorded 2,062 cases of the Omicron variant, or 19.08 percent of total cases after reopening since Nov.1.
The government earlier reinstated its mandatory COVID-19 quarantine for foreign visitors and scrapped a quarantine waiver due to Omicron, having only reopened more broadly on November.
The committee viewed that policy coordination among government agencies was critical to ensure that the economic recovery remained intact.
The Thai economy would grow 0.9 percent in 2021 and continue to expand by 3.4 percent and 4.7 percent in 2022 and 2023, respectively, the minutes said.
Thailand’s inflation would increase temporarily in line with global energy prices but would be within the target, the minutes said. The central bank will closely monitor the baht, which remained highly volatile, according to the minutes.
Meanwhile, Thailand’s headline consumer price index (CPI) rose less than expected by 2.17 percent in December from a year earlier, driven by higher oil and vegetable prices, the commerce ministry said on Wednesday.
The reading compared with a forecast for a rise of 2.6 percent in a Reuters poll and followed November’s 2.71 percent increase.
The core CPI index was up 0.29 percent from a year earlier, versus a forecast for a 0.31 percent rise.
For 2021, the headline CPI increased 1.23 percent while the core CPI index rose 0.23 percent.
The headline CPI in 2022 is projected to rise by 1.5 percent. — Reuters
