Thailand's economy faced significant downsize risks and limited policy room should be preserved to be used for the most effective time, the central bank's minutes of its last meeting.

Illustrative image (Photo: Reuters)

The meeting minutes said with the prolonged outbreak of COVID-19, Southeast Asia’s second largest economy may underperform compared to prior projection, reducing business liquidity and slowing employment.

On June 23, the Bank of Thailand's (BoT) Monetary Policy Committee kept its policy rate unchanged at a record low of 0.5 percent for a ninth straight meeting to help support the economy as it struggles with the country's latest and biggest COVID-19 outbreak that emerged in April.

At the meeting, the BoT cut its 2021 economic growth forecast to 1.8 percent from 3.0 percent and its 2022 outlook to 3.9 percent from 4.7 percent.

The recurring outbreaks increased labour market fragility and "recovery would be W-shaped" and slower than in the past, the minutes said.

The committee would ensure that exchange rate movements would not hinder the economic recovery, the minutes said.

Source: VNA