The Bank of Thailand views domestic factors as a greater source of risk for the Thai economy than external pressures now that the public has become familiar with the likely tapering of the US Federal Reserve's monetary stimulus scheme, says a senior central bank official.
Though most investors expect the Fed to begin scaling back its money-pumping programme in December, the Bank of Thailand sees the manoeuvres taking place after the US government resolves its budget impasse and raises the limit on its debt ceiling in early 2014, said Parisun Chantanahom, senior director of the international department.
"While the US economic figures are better than expected, it is believed that Janet Yellen, President Barack Obama's nominee to head the Fed, will not decide to begin tapering the Fed's monetary stimulus programme in December, as there is more time to assess US economic conditions early next year," he said.
Ms Yellen recently said the economy and labour market were performing far short of potential and must improve before the Fed can begin curbing its monetary stimulus.
Siri Ganjarerndee, a member of the central bank's Monetary Policy Committee (MPC), said the panel will evaluate domestic political uncertainties before making its policy rate call on Nov 27.
He said the timing is not right to start normalising monetary policy, citing a slew of domestic headwinds clouding the economic picture.
In an annual report released this week, the International Monetary Fund said the central bank should stand ready to normalise monetary policy if inflationary pressure re-emerges.
The rate-setting committee has stood pat with a benchmark rate of 2.50% for three straight meetings. The Nov 27 call will be the year's last.
Mathee Supapongse, the central bank's senior director of macroeconomic and monetary policy, said the outlook for the coming period will be assessed in the light of domestic political events.
Capital flows remain in a normal state and recent fund outflows have not been excessive, he said.
Meanwhile, CIMB Thai Bank analyst Amonthep Chawla said the country's quarter-on-quarter GDP may have shrunk for a third straight quarter in the three months to September.
The National Economic and Social Development Board will release its third-quarter GDP data on Monday. Thailand slipped into a mild technical recession in the three months to June.
With the cooling economy, the MPC could cut the policy rate at this year's final meeting, Mr Amonthep said.
The economy should start picking up in the final quarter on stronger exports, he said, while the impact of political unrest will be minimal on consumer confidence and tourism.
But if the rallies turn to violence, Asian tourism _ especially from Chinese whose main activity is shopping in Bangkok _ will be hurt, Mr Amonthep said.