Edited Minutes of the Monetary Policy Committee Meeting (No.1/2021) 
3 February 2021, Bank of Thailand 
Publication Date: 17 February 2021 
Members Present 
Sethaput Suthiwartnarueput (Chairman), Mathee Supapongse (Vice Chairman),  
Paiboon Kittisrikangwan, Kanit Sangsubhan, Rapee Sucharitakul, Somchai Jitsuchon,  
and Subhak Siwaraksa 
The Global Economy and Financial Markets 
The global economy continued to recover despite new waves of COVID-19 infections. While 
economic activities in the manufacturing sector improved, those in the services sect or were 
expected to deteriorate, albeit by a lesser degree compared with the first wave of the pandemic 
thanks to the less strict containment measures undertaken by many countries. Meanwhile, many 
major economies already began their vaccination campaigns and were expected to achieve herd 
immunities by mid-2021. Such vaccination progress, along with continued financial and fiscal 
support, would help bolster the global economic recovery.  
The global financial market sentiment continued to improve .  However, capital inflows to 
emerging markets, including Thailand, did not markedly increase. Market participants expected 
a stronger US economic recovery  as the decline in political uncertainties strengthened the 
likelihood of the US fiscal stimulus package . While long- term US Treasury yields rose in 
accordance with these expectations, Thailand’ s long - term government bond yields did not 
experience a similar increase. On the exchange rate, the baht against the US dollar moved within 
a narrow range and was in line with regional currencies. The nominal effective exchange rate 
(NEER) remained stable since the previous meeting.  
Looking ahead , once the global health crisis from the COVID - 19 pandemic becomes  
well- contained, and the global economy continues to recover with most central banks 
maintaining their accommodative stance, risk-on sentiment would likely persist. In such case, 
bond yields and equity prices could increase. The US dollar would likely weaken, with the regional 
currencies appreciating against the US dollar. However, the outlook remained highly uncertain 
and could result in increased volatility in the global financial market. The Committee thus deemed 
it necessary to closely monitor these developments.  
Domestic Economy and Financial Stability 
The Thai economy was affected by the resurgence of the COVID -19 outbreak. However,  
the impact would be less severe than last year thanks to the less strict containment measures, 
the additional support from the timely and targeted government measures, and the continued 
export recovery. The economy would thus expand in 2021, albeit at somewhat a lower rate than 
the December 2020 projection. Negative factors affecting the economy were as follows. First, 
the recent outbreak turned out more severe than previously assessed . As a result, private 
consumption would significantly weaken in line with lower labor income and higher 
unemployment. Approximately 4.7 million workers were expected to be at risk of facing severe -2- 
 
income losses. These included daily-hired and self-employed workers in the non-farm sectors,  
as well as workers in the hotel industry. Among these workers, around 1.2 million could become 
unemployed or underemployed.1/ Second, foreign tourist figures in 2021 were revised downward 
from the previous assessment as the reopening plan would likely be more gradual. Third, public 
expenditure for the fiscal year 2022 was expected to be  lower than previously assessed . 
Nonetheless, some positive developments would partially offset the negative factors. These are 
(1) the additional fiscal stimulus in the first half of 2021, (2) better-than-expected recovery of 
most merchandise exports following the global economic recovery, particularly the US economy 
which was expected to expand more than previously assessed on the back of fiscal stimulus, and 
(3) the postponement of some budget disbursement from the fourth quarter of 2020 to 2021. 
Headline inflation was projected to return to the target in the middle of 2021 and would stay 
close to the lower bound of the target range throughout the forecast period. Medium-term 
inflation expectations remained anchored within the target. 
Uncertainties surrounding the outlook of the Thai economy remained high with considerable 
downside risks. In the near term, the economic recovery would depend on the resolution of  
the recent outbreak and the contemporaneous fiscal support. Over the medium term, it would 
depend on several factors. First, the recovery of foreign tourist figures which could be influenced 
by many factors including the plan for reopening the country, the situation of the outbreak, and 
the effectiveness of the vaccines. Second, the procurement and distribution of the COVID-19 
vaccines in Thailand, which would have implications for domestic economic activities and the 
reopening policy. Third, the fiscal support, both in terms of magnitude and duration. Fourth, the 
labor market situation, which became more fragile and could have an impact on private 
consumption.  
The financial system became more vulnerable due to the negative shocks from the recent 
outbreak. Financial positions of households became more fragile following income shocks, 
particularly the low-income households which had not yet recovered from the previous outbreak. 
Thus, credit quality on these households would have to be closely monitored . Meanwhile, 
revenues and financial positions of businesses were affected, especially those in the sectors 
relating to tourism and services which had not yet recovered from the previous outbreak .  
Small and medium enterprises (SMEs) experienced difficulties in accessing credit due to increased 
credit risks which could lead to higher probabilities of default for some businesses. The shortfall 
in liquidity, especially for  SMEs, could have a negative feedback effect on the economy . 
Nevertheless, the overall impact on the financial institution system and the bond markets would 
be limited, as financial positions of commercial banks remained robust and were capable of 
withstanding potential deterioration in loan quality in the future. 
Discussions by the Committee 
The Committee discussed the impact of the recent the COVID-19 outbreak on the economy and 
expected the Thai economy to expand at a somewhat slower pace than the previous assessment. 
Moreover, the pace of the recovery among sectors would become more uneven which would 
induce increased vulnerabilities in the labor market. Meanwhile, risks to the economic outlook 
                                         
1/ Underemployed workers are defined as those working less than 24 hours per week. -3- 
 
increased, particularly from the uncertainty in the foreign tourist figures . These would have 
implications for the appropriate mix of financial and fiscal measures. The details were as follows. 
 Although the impact of the recent outbreak on the Thai economy would be less than 
last year, the pace of the recovery would be slower and more uneven among sectors 
and firms. In particular, several groups of firms had not recovered from the previous wave 
of the outbreak and now were further hit. SMEs were particularly affected more than 
large corporates. The Committee expressed concerns over increased vulnerabilities in 
the labor market, especially for daily-hired and self-employed workers in the non-farm 
sectors and workers in the hotel industry . The numbers of unemployed and 
underemployed workers were projected to spike in the first quarter of 2021, and would 
subsequently decline gradually in line with the infection rates, the relaxation o f the 
containment measures, and the fiscal stimulus going forward. 
 The Committee viewed that the public sector should implement more targeted 
measures in a sufficient manner, and these measures should be front -loaded at the 
onset of the negative shocks to prevent negative feedbacks on the economy and lessen 
long-term economic scars. Otherwise, it would become more difficult and costly to 
reverse the impacts. For example, unemployed workers could take a long time to re-enter 
the labor force. On fiscal measures, the public sector should accelerate the spending on 
relief and support measures, especially project approvals under the Emergency Decree 
Authorizing the Ministry of Finance to Raise Loans to Solve Problems, to Remedy and 
Restore the Economy and Society, since the authorized borrowing period would end in 
September 2021. Financial and credit measures should quickly alleviate the debt burden 
of affected businesses and facilitate liquidity distribution through the existing loan 
guarantee scheme (PGS9). Going forward, the public sector should prioritize on economic 
restoration measures and expedite budget disbursements to sustain the momentum of 
fiscal policy. Additional government support could be tied to clearly stated objectives and 
conditions, such as employment retention or business model adjustments to the post-
COVID environment. These would help alleviate vulnerabilities in the labor market and 
raise long-term potential growth of the economy.   
 The Committee viewed that the major risk to the economic outlook was the recovery 
of foreign tourists. External factors which could affect the pace of border reopening 
included travel restrictions from China and virus mutations that could reduce vaccine 
efficacy. Important domestic factors included the efficacy and distribution of COVID-19 
vaccines, the willingness of the population to take the vaccine, and the ability to control 
and screen travelers crossing the borders.  
 The Committee deemed it important that the public sector should prepare a package of 
financial and fiscal measures corresponding to risks and economic development for 
each period going forward, and such policy package should be readily available if 
necessary. For instance, in the case that Thailand could not reopen the borders to admit 
foreign tourists during the peak season from late 2021 to early 2022, the government 
should prepare fiscal measures and provide additional stimulus to cushion against such 
uncertainty. The Committee noted that rising public debt in the medium term would not -4- 
 
pose a significant risk to fiscal sustainability .2/ Regarding financial measures,  
the Committee suggested that the Bank of Thailand and related agencies should closely 
monitor the situation and stand ready to implement additional financial measures, 
including the potential extension of measures that would expire in 2021 if necessary. 
Monetary Policy Decision 
The Committee voted unanimously to maintain the policy rate at 0 . 50 percent to support 
the economic recovery which remained highly uncertain. 
The Committee assessed that the Thai economy would expand somewhat slower than the 
previous assessment due to the impact of the new wave of the COVID - 19 outbreak on the 
economy. Nevertheless, recoveries across sectors were likely to be more uneven. Additional 
measures should thus be more targeted  in line with the need and potential  prospect of 
businesses. The problem facing the Thai economy was less about the level of the policy 
interest rate as lending rates and bond yields were already at a record low. While the overall 
liquidity in the banking system remained ample, the main challenge was about distributing 
liquidity to businesses and households in need sufficiently . Thus, financial and credit 
measures such as credit guarantee schemes that reduce credit risks should be enhanced and 
would be the appropriate solution . Moreover, uncertainties surrounding the economic 
recovery remained high. The Committee therefore voted to maintain the policy rate at this 
meeting to preserve the lim ited policy space to act at the appropriate and most effective 
timing to maximize its effectiveness. 
The Committee viewed that if the baht appreciated rapidly, the economic recovery could 
be affected .  Therefore, the Committee would closely monitor developments in foreign 
exchange marke ts and capital flows as well as consider the necessity of implementing 
additional appropriate measures to ensure that the exchange rate movements would not 
hinder the economic recovery . These could be achieved b y reducing pressures on the  baht 
and addressing structural problems in the Thai foreign exchange market through continued 
efforts in expediting the new foreign exchange ecosystem. In addition, the Committee viewed 
that by encouraging Thai institutional investors to increase their po rtfolio investments 
abroad, it would facilitate capital outflows and improve the balance between inflows and 
outflows.  
The Committee viewed that policy coordination among government agencies would be 
critical in supporting the economic recovery going forward. In addition, financial and fiscal 
measures should be expedited and be more targeted in line with the need and potential  
prospect of businesses.  Monetary policy must remain accommodative. Financial and credit 
measures should expedite liquidity distribution to the affected groups in a targeted and timely 
manner, for example, through credit guarantee schemes to reduce credit risks . In addition, 
appropriate conditions and incentive structures for employee retention could be considered. 
Financial institutions should expedite debt restructuring to have broader impacts. Additional 
                                         
2/ This was due to (1) the low level of pre-pandemic public debt, (2) the remaining average time to maturity of debt being 
approximately 10 years, (3) the debt being mostly denominated in local currency, and (4) the nominal GDP growth was 
expected to be higher than interest rates at which the government pays its debt. -5- 
 
fiscal measures should be expedited in a target ed manner to support the economy . Policy 
packages consisting of financial and fiscal measures should be prepared according to risks in 
each period  going forward  in order to safeguard the economy against negative shocks . 
Furthermore, the government should simultaneously implement supply- side policies to help 
support sustainable economic recovery in the post - COVID environment. In particular, labor 
upskilling and infrastructure investment to support the digital economy should be promptly 
pursued to help support sustainable economic recovery in the long term. 
Under the monetary policy framework with the objectives of maintaining pric e stability, 
supporting sustainable and full-potential economic growth, and preserving financial stability, 
the Committee continued to put emphasis on supporting the economic recovery .  
The Committee would monitor the outbreak situation in Thailand, fragil ity in the labor 
market, the procurement and distribution of the vaccines, the progress of protocols for 
admitting foreign tourists, and the adequacy of the government measures, in deliberating 
monetary policy going forward . The Committee would stand ready  to use additional 
appropriate monetary policy tools if necessary. 
Monetary Policy Group 
17 February 2021 Key Issues of the MPC Meeting No.1/2021
3 February 2021
Impact of the new wave of the COVID-19 outbreak
Edited Minutes of the MPC Meeting No.1/2021เศรษฐกิจ
ในประเทศEconomic recovery continued to be on track 
but the pace of expansion would now be somewhat slower than the previous forecast 
in line with the latest Fiscal Policy Office’s projection 
0
20
40
60
80
100
120
140
160
180
200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
2018 2019 2020 2021 2022
GDP
MPC Dec-20 MPC Feb-21
• More severe economic impacts from the COVID-19 
containment measures than previously assessed
• Lower-than-expected foreign tourist figures
• Lower-than-previously-assessed FY2022 public expenditure 
Negative shocks since the previous MPC, namely
• Additional fiscal stimulus measures in first and second 
quarters of 2021
• Export recovery for almost all categories of merchandises
• Postponement of budget disbursement from the fourth 
quarter of 2020 to 2021
were partially offset by some positive developments:
1/5Edited Minutes of the MPC Meeting No.1/2021
GDP levelThe recent outbreak became more severe and proliferate faster than expected. 
 Economic impacts were less compared with last year outbreak 
thanks to less strict containment measures
0
400
800
1,200
1,600
2,000
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50
First wave
New wave (excluding foreigners)
Number of accumulative new COVID-19 cases in the past 7 days
cases
Number of days from the beginning of the outbreak
Starting date of the outbreak
First wave: 12 Mar 20
New wave: 19 Dec 20
New wave (Jan 21 ~) First wave (Apr ~ Jun 20)
Severity and duration of the outbreak
The outbreak was severe and spread widely with several clusters.
The duration of the outbreak would be more prolonged
(containment measures for 2-3 months, gradual re-opening within 2 months)
The outbreak was severe, and strict containment measures 
were implemented countrywide for a month and gradually 
relaxed within 2 months.
Stringency of the containment measures
The containment measures are targeted, area-based and less strict relative to the 
previous outbreak (even in the strictest areas)
No closure on shopping malls/Allow dine-in/Able to travel across cities if necessary
Strictest containment measures implemented countrywide
Vaccination timeline More certain timeline Unknown timeline
Public health capacity
Greater capacity in testing and hospitalization than the previous outbreak
Capacity of COVID-19 testing: max 50,000 persons/day,
Capacity of cumulative patients in the hospitals: 20,000 persons
N/A
-100
-75
-50
-25
0
25
t0 t10 t20 t30 t40 t50 t60 t70 t80 t90
1st wave
2nd wave
New wave First wave
Severe cases ~25 cases1/ ~800 cases2/
Death ratio 0.1% 1-2%
1/ data as of 9 Jan 64
2/ calculated from the ratio of severe cases (20% from the total cases)
Apple Mobility index (cities in red zone)
Source: discussion with medical personnel and news compilation
Source: Apple mobility trend report, calculated by Bank of Thailand.
Latest data as of 26 Jan 21
Source: Department of Disease Control, calculated by Bank of Thailand Latest data as of 25 Jan 21
% Change from t0
The impact of the recent outbreak on the Thai economy would be less severe 
than last year due to less strict containment measures 
2/5Edited Minutes of the MPC Meeting No.1/2021เศรษฐกิจ
ในประเทศ
Revenue outlook during the new wave of the outbreak
Revenue 
position 
prior to the 
new wave of 
the outbreak
Slightly decreasing
Bad
Good
Already recovered from the 
previous wave
 Electrical appliances
 Electronics
 Medical devices/ rubber gloves
 Canned food
 Freight transport
 Large construction firms relying 
on public sector projects or 
ongoing private sector projects
Not fully recovered  Auto- and auto-parts
 Low-rise residential property 
Small impact on revenue
 Textiles and apparel
 Condominiums relying on Thai customers
Revenues had already been affected during the previous wave. 
Modest impact on revenue is expected after the second wave 
with subsequent slow recovery.
Already recovered from the 
previous wave
 Refrigerated and frozen food
Not fully recovered
 Trade and retail spaces
 Restaurant
 Public buses
 Hotels in provinces that depend 
on domestic tourists
 Construction SMEs relying on 
private sector projects
Revenue would be affected temporarily, but would recover after the 
relaxation of containment measures
 Condominiums in the areas with 
oversupply or condominiums 
that rely on foreign customers
 Hotels in provinces that depend 
on foreign tourists
 Airlines and tour buses
Revenue had already been affected during the previous wave 
and excess capacity remains high. Recovery is expected to be slow
until vaccines are available and borders are re-opened for tourism.
Economic recovery would be more uneven 
which would require appropriate, targeted, and sufficient measures for each group 
Significantly decreasing
Source: BOT assessment 3/5Edited Minutes of the MPC Meeting No.1/202198.7 Manufacturing (27.9%)
99.9 Trade (15.5%)
76.2 Tourism-related services 
e.g. hotels (7.6%)
108.0 Other services, 
e.g. real estate (17.7%)
108.4 Medical, Education and 
Public Administration (20.6%) 
103.1 Total income
60
70
80
90
100
110
120
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
Note: ( ) represents proportion of non-farm employees in 2020
96.7 
100.1 
107.2 
103.1 
90
95
100
105
110
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
income <= 10,000 baht (43%)
income 10,001 - 15,000 baht (27.5%)
income >15,000 baht (29.5%)
all employee in non-agricultural sectors
Note: ( ) represents proportion of non-farm employees in 2020
Index (3mma, sa)
(Dec 19 =100)
Source: the Household Socio-economic Survey and the Labor Force Survey by National Statistical Office, calculated by Bank of Thailand
-20
-15
-10
-5
0
5
10
Q1-18
Q2-18
Q3-18
Q4-18
Q1-19
Q2-19
Q3-19
Q4-19
Q1-20
Q2-20
Q3-20
Q4-20
%YoY
Dec 20
Index (3mma, sa)
(Dec 19 =100)
Workers who were self-employed, had low income, or employed in the tourism sector  
faced significant income loss since the first wave of the outbreak
and thus became more vulnerable than other groups
Aggregate income of self-employed 
workers in non-farm sectors
Aggregate income of non-farm employees 
classified by income level
Aggregate income of non-farm employees 
classified by sector
4/5Edited Minutes of the MPC Meeting No.1/2021Approximately 4.7 million workers were at risk of being affected by the new wave 
of which 1.2 million workers might become unemployed or underemployed
* Significantly-affected sectors included retail trade, hotels, restaurants and other services
** Underemployment defined as hours worked less than 24 hours per week.
Source: Labor market data in 2020 by National Statistical Office, calculated by the Bank of Thailand
Full-time hotel employees
Daily-hired employees 
in non-agricultural sectors
Self-employed workers 
in non-agricultural sectors
Workers in 
affected 
sectors*
significant income loss
more likely to become unemployed
5.1 millon workers in total
In the red-zone area 2.8 million workers
8.2 millon workers in total
In the red-zone area 4.2 million workers
Workers in 
affected 
sectors
underemployed**
 ~0.5 million workers
underemployed ~0.6 million workers
significant income loss ~3 million workers
~0.5 million workers
~0.1 million workers
5/5Edited Minutes of the MPC Meeting No.1/2021