|
Economy
|
2000-06-04 13:58:00-04
|
Bank of Thailand to raise GNP Estimate
|
|
Central bank head will raise growth projection to 5.2% to coincide with projections of non-government economists
|
According to Governor MR Chatu Mongol Sonakul, the Bank of Thailand will soon raise the forecast for this year to 5.2%, coinciding with forecasts made by non-government economists. The central bank has moved to an inflation-targeting model for monetary policy. Using the new model will result in an increase of 0.7 to 0.8 point higher than under the old model. In other matters, Chatu Mongol said the central bank has developed a temporary market for 14-day securities repurchase transactions ('repos'), to create a benchmark interest rate, currently at 1.5%. He indicated this market would be abandoned within two years. Banking sources estimate that excess liquidity in the financial system is maintained at more than 500 billion baht to keep the n14-day repo rate at the target level. Thailand is maintaining a low interest rate level to support debt restructuring and economic recovery. With May CPI inflation at 1.7% for the year, economists expect the Monetary Policy Board to make no changes in its targets or policies. The central bank is targeting core inflation, which excludes volatile energy and food prices and in May was slightly lower than the publicized inflation rate, which was boosted by higher oil prices Chatu Mongol said that inflation forecasts will be more of a problem next year because Thailand will increase the value-added-tax to 10% in 2001, after its temporary reduction to &% for two years. VAT figures will be part of the core inflation rate. Omitting them will take too large of a chunk out of the GNP, as oil and food prices are already omitted, the governor said.
|
