Bank of Thailand pauses on rates amid fiscal tailwinds

BANGKOK – The Bank of Thailand (BoT) has maintained its policy rate at 2.00%, as widely expected - while revising its GDP growth forecast lower to 1.5% for 2014 and to above 5% for 2015. ANZ Bank says unlocking of fiscal spending following the imposition of martial law should manifest itself in a V-shaped recovery for Thailand in the second half of 2014 and beyond, with a pipeline of infrastructure investments materialising after being delayed by the political gridlock. 

ANZ sees likely growth in public and private spending spurred by infrastructure investment. “In BoT’s view, tepid recovery of merchandise exports and tourism pose downside risks to growth. However, we opine that, with the curfews being lifted in key tourist destinations, the tourism-related sectors are poised for a strong rebound. “  www.live.anz.com (ATI).