Thailand Interest Rate

The Bank of Thailand kept its key interest rate at 2.25% during its final meeting of 2024 after a surprise 25 bps reduction in October, as widely expected. The decision came amid an acceleration in inflation and GDP growth and safeguarding long-term macro-financial stability. Inflation remained below the central bank's target for most of this year but rose to a six-month high of 0.95% in November, edging closer to its lower-end target range of 1-3%. Meanwhile, the economy grew 3% in Q3 of 2024, the strongest yearly growth since Q3 of 2022, driven by government spending and fixed investment. The Thai economy is expected to grow by 2.7% in 2024 and 2.9% in 2025, each boosted by tourism, domestic demand, and improved exports of electronic products. However, recovery remains uneven, with the recovery for SMEs and certain manufacturing industries facing pressures from declining competitiveness. Meanwhile, headline inflation in 2024 and 2025 is estimated to be 0.4% and 1.1%, respectively.