Bangkok (VNA) – Thailand's central bank (BoT) has pledged to maintain a strong monetary policy framework amid rising global uncertainty, particularly as new policies are expected to be introduced in the US.
At a monetary forum held by the BoT on January 6, speakers highlighted that US President-elect Donald Trump’s tentative policies, including on taxes and tariffs, trade, energy and immigration, are likely to contribute to increased uncertainty in global financial markets and economies, including China.
These policies may cause inflation to spike in the US and a prolonged period of high US Federal Reserve policy rates, according to the forum.
Such uncertainty may have both positive and negative effects on the Thai economy. For example, Thailand's exports to China could decelerate, and the country may face heightened competition due to an influx of Chinese goods.
Thailand may benefit from a movement of production bases into the country, although this could be tempered by slower investment due to rising global economic uncertainty, noted the forum.
If China's economy slows because of trade conflict with the US, Thailand's export and tourism sectors could also be affected.
Economists urged the Monetary Policy Committee (MPC) to closely monitor Trump’s policy developments.
Last month, the MPC kept its policy rate at 2.25% to support the economy. The BoT emphasised its flexible monetary stance, ready to adjust as needed. While Thailand’s economy continues to recover, progress remains uneven.
According to a BoT report, the country's household debt-to-GDP ratio was 89% in the third quarter of 2024, easing from 89.6% the previous quarter.
Meanwhile, the Bank for International Settlements suggested the household debt-to-GDP ratio should not exceed 80%, as exceeding this threshold can negatively impact economic growth and domestic consumption in a country./.
VNA
