Thailand's key interest rate likely to remain at 1.5% until 2018

BANGKOK, September 28 (TNA) - The Bank of Thailand (BOT) is expected to maintain its key interest rate at 1.50 per cent until next year although the US Federal Reserve (FED) is likely to raise its key interest rate shortly. Phacharaphot Nuntramas, macroeconomic chief of the Economic Intelligence Center (EIC), under the Bangkok-based Siam Commercial Bank (SCB), made the assessment on Thursday, saying that he believes the BOT's Monetary Policy Committee (MPC) should decide to keep the central bank's key interest rate intact until 2018 during its upcoming meeting, as the Thai economy has expanded moderately. Phacharaphot also projected that the Thai baht should continue to hover between 33.50 and 34.00-34.50 baht a US dollar until next year. Phacharaphot, meanwhile, revealed that his EIC plans, in November, to raise its forecast figures of Thailand's both gross domestic product (GDP) and export growth on average in 2017, after following up the updated assessment of the country's GDP growth in the third quarter of this year by the National Economic and Social Development Board (NESDB). The EIC macroeconomic chief initially forecast, however, that Thailand's GDP growth should be over 3.6 per cent year-on-year on average, but less than 4.0 per cent year-on-year, while export growth should be over 7 per cent year-on-year on average, but less than 19 per cent year-on-year. The EIC macroeconomic chief pointed out if the Thai export growth exceed the 7 per cent-year-on-year on average benchmark, it will be the highest level in six years, thanks to the recovering economies of the country's major markets simultaneously, namely the United States, the European Union (EU) and Japan. According to the senior SCB personnel, Thailand's export growth stood at 8.9 per cent year-on-year during the first eight months of this year, boosted mainly by increasing shipments of farm and food products and drinks, as well as electronic parts, and the national economy should grow by 3.5 per cent year-on-year next year, driven mainly by rising public and private investment projects, including those in the government-backed Eastern Economic Corridor (EEC). The senior SCB personnel cautioned, however, that there are remaining risk factors for the expanding Thai economy, namely a slowdown in the purchasing power of local households, especially that of low and middle income earners, people's rising costs of living and a possible shortage of unskilled labor. (TNA)