The Bank of Thailand has slashed this year's economic growth forecast to 4.2% due to tepid domestic consumption and the fragile state of the global economic recovery but said rising household debt limits the scope for a policy rate cut.
"With such high debt, the central bank must be vigilant and does not want to lower the rate. A rate reduction can stimulate the economy for a while but won't help to boost economic growth in the long run," Paiboon Kittisrikangwan, a central bank assistant governor, told a press conference yesterday.
He said if the economic situation changes, the central bank is ready to adjust its policy.
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