Rate cut offers limited benefits: SCB
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The policy rate cut will have a limited impact on the economy due to several unfavourable domestic factors, said Siam Commercial Bank's Economic Intelligence Centre.
It noted that the rate would not boost private consumption, given that farmers' income has fallen in line with falling commodities prices. Meanwhile, the government also plans a number of tax measures which may affect people's income.
Its positive impact on private investment will also be limited, given more restrictions on lending to SMEs in line with declines in the overall economic activities.
Without a boost in public spending, domestic spending would stay unchanged, it said.
While noting that the rate cut was a surprise, it said the policy rate should stay unchanged at 1.75 per cent throughout this year.
