Thai monetary policy must stay flexible as headwinds build, central bank deputy says
Under these circumstances, Roong Mallikamas, one of the two candidates short-listed to lead the Bank of Thailand from October, said that the central bank's monetary policy should remain at an accommodative level to support the economy.
"We'll see a tailing of the economic growth in the second half of this year mainly due to the tariff effects," Roong told Reuters in an interview. "We do anticipate a marked slowdown in economic activities".
"I think basically the tariff effects also magnify... our country's structural problems."
Southeast Asia's second largest economy has lagged regional peers since the pandemic, growing only 2.5% last year and forecast to expand by 2.3% in 2025, bogged down by high levels of household debt and tepid consumption.
After rate cuts in October, February and April, the Bank of Thailand last week left its key interest rate unchanged.
"I think the pause was just to say that this is to assess what we have already taken," she said. "Another issue is how to maximise the remaining policy space that we have."
"If the outlook deteriorates, if I were an MPC member, I would not be reluctant to ease," Roong said. The BOT will next review policy on August 13.
Thailand faces renewed political chaos after Prime Minister Paetongtarn Shinawatra was suspended from office by the Constitutional Court on Tuesday.
The political uncertainty is currently not an elevated concern, with government spending and trade negotiations with the U.S. likely to continue without interruption, Roong said.
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