Thailand Interest Rate

The Bank of Thailand unexpectedly lowered its key interest rate by 25 basis points to 2.25% during its October meeting, marking the first rate cut since early 2020 and a move long advocated by the government. The decision was made amid a sluggish economy and inflation remaining below the lower end of its target range between 1% to 3%. Most committee members believed that the current stance would help alleviate the debt burden to some extent without hindering efforts to reduce the household debt-to-income ratio. The Thai economy is expected to grow close to the projected 2.7% in 2024 and 2.9% in 2025, driven by tourism, private consumption, and improved exports of electronic products. However, recovery remains uneven, with exports and certain industrial sectors, including SMEs, facing structural challenges. Meanwhile, headline inflation in 2024 and 2025 is expected to be 0.5% and 1.2%, respectively.