Bank of Thailand keeps policy rate unchanged at 1.50%
Sakkapop Panyanukul, Secretary of the Monetary Policy Committee (MPC), announced on Wednesday (October 8) that the committee decided to maintain the policy rate at 1.50%, with a 5-2 vote. Two members advocated for a 0.25% rate cut to 1.25%.
The committee forecasted moderate economic growth for Thailand, projecting 2.2% in 2025 and 1.6% in 2026. The economy's expansion is expected to be supported by manufacturing and exports, although impacts from US trade policies are likely to slow growth in the latter half of 2025 and into 2026. Tourism and private consumption are predicted to recover gradually, bolstered by government stimulus measures. Meanwhile, exports of electronics are expected to remain strong.
The Committee assesses that monetary policy should be accommodative to support economic recovery. The transmission of previous policy rate cuts to the economy is ongoing. Most committee members give importance to the timing and effectiveness of monetary policy, given the limited policy space, and therefore vote to maintain the policy rate at this meeting.
Two committee members deem that monetary policy should be further accommodative to ensure that financial conditions remain conducive to economic recovery and to help support liquidity as well as alleviate the debt burden of SMEs and vulnerable households.
Headline inflation is expected to be lower than previously anticipated, forecasted at 0.0% in 2025 and 0.5% in 2026, driven mainly by declining energy and food prices.
However, deflation risks remain low, with most goods and services continuing to see price increases or stability. Core inflation is expected to remain at 0.9% for both years.
Despite the accommodative stance of monetary policy, the committee noted that overall credit growth remains weak due to cautious lending practices, particularly to SMEs and low-income households.
Additionally, the baht's appreciation against the US dollar has impacted exporters, and the committee emphasised the need to monitor credit growth and currency movements closely.
The MPC reaffirmed its commitment to maintaining price stability and supporting sustainable economic growth. The committee will continue to assess macroeconomic conditions and adjust the monetary policy stance as needed to manage inflation and economic risks.
