Mr. Titanun Mallikamas, Assistant Governor of the Bank of Thailand and Secretary of the Monetary Policy Committee (MPC), said on Tuesday, June 2, 2020 that the economic outlook was highly uncertain given the global economic and financial environments, with risks to the economic outlook tilting downward. At the latest policy meeting the MPC expressed concerns over the strength of the baht that could derail the economic recovery, and emphasized that developments in the financial markets and the foreign exchange markets warranted close monitoring.
Latest economic data for April 2020 point to a deficit in the current account of around 0.7 billion U.S. dollars. Excluding gold, the current account balance recorded a deficit of around 3.1 billion U.S. dollars, the largest deficit since 1990s. Looking ahead, the recovery in global oil prices and a prolonged shortage of inbound tourists are expected to weigh on the current account outlook.
“The monthly current account is likely to be nearly balanced until the tourist revenues recover, down from the historical average of around 3-4 billion U.S. dollars in surplus per month during the past few years.” This trend represents a shift in the current account balance and exchange rate dynamics following the COVID-19 pandemic. The current account is not expected to be the main driver of baht appreciation pressure in the forthcoming period months.
The Committee will release the new growth, inflation, and current account projections in the next MPC meeting on June 24, 2020.