MPC likely to keep policy rate unchaged: KResearch
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Kasikorn Research Centre managing director Charl Kengchon is convinced that the Monetary Policy Committee would maintain the policy rate at the meeting on March 12, despite economic slowdown.
He said that a rate cut is possible but it's unlikely to take place in this round.
The policy rate is now 2.25 per cent, the lowest since January 2011.
While the political climate remains unclear, he said that inflation may spike if the Russian-Ukraine tension escalates. Oil prices may rise by 4-5 per cent and this will limit the chance of a rate cut.
Several houses expected the MPC to cut the policy rate, given slow economic activities.
KResearch expected that the gross domestic product in the first quarter would contract by 2 per cent from the previous quarter, as consumption and investment remains low while export recovery is unclear.
There is a chance that the Thai economy will expand by only 2 per cent this year, if (1) the permanent government could not be formed within April, (2) the export sector remains fragile, and (3) the drought in Thailand and elsewhere escalates.
Its current forecast is 3 per cent.
