BoT to study effects from Govt’s populist policy

BANGKOK, 21 December 2010 (NNT) – The Bank of Thailand (BoT) is monitoring the effects of the government’s populist policy in order to adjust its monetary policy in accordance with its impact on inflation and economic expansion.

According to Deputy BoT Governor for Monetary Stability Atchana Waikwamdee, the recently- announced populist policy aimed at developing the country in an unconventional manner is not too late a policy to help stimulate the nation’s economy in the year 2011. The policy will give more opportunity for lower class people to gain access to jobs and capital; which will reduce the social gap.

The Central Bank is currently assessing the effects of the policy on inflation and economic expansion in order to come up with appropriate monetary policies. The findings will be reported in the next Monetary Policy Committee meeting, to be held on January 12th. The committee will at that time analyze the use of populist policy budget to see if it will need to reduce the budgets for other policies or projects or not.

The Deputy Governor said that investments in mega projects could bring better economic growth than the populist policy; however, reducing the social gap is also important.

Meanwhile, BoT Senior Director for Domestic Economy Department Mathee Supapongse pointed out that government’s relief measures such as free bus, water, and electricity, as well as the pegging of LPG prices will not help holding down the inflation rates as much as intended to.