Thailand – BoT minutes: Omicron outbreak key risk to economic recovery

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% 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 country has recorded 2,062 cases of the Omicron variant, or 19.08% 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% in 2021 and continue to expand by 3.4% and 4.7% 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.