Economists predict at least 2 more BoT rate reductions

Bangkok Bank says investor confidence would be damaged if the US does not reduce its proposed tariff rate for Thai imports.

- NAREERAT WIRIYAPONG

The Bank of Thailand is expected to cut the policy interest rate at least twice more this year as the economy could contract by 0.1-1.1% if a US tariff of 29-36% is slapped on Thai exports, say economists.

Tharavit Prayochvibul, assistant vice-president at Bangkok Bank (BBL), said the economy is likely to grow less than 1% this year if the government cannot persuade Washington to lower its proposed tariff on Thai exports from 36%.

“Investor confidence would be hit hard, prompting foreign direct investment to divert from Thailand towards other Southeast Asian countries, particularly Vietnam, which has a tariff of only 20%,” said Mr Tharavit.