Heteronomics Archive

February 26, 2025

Thailand: 25bp Rate Cut To 2% (Consensus 2.25%) in Feb-25

Contrary to consensus expectations, the Bank of Thailand cut its policy rate by 25bps to 2.00%, citing weaker-than-anticipated growth and rising downside risks.
Structural weaknesses in manufacturing and heightened import competition continue to challenge economic momentum, while inflation remains subdued due to supply-side factors.
Future policy will depend on domestic demand resilience, external trade developments, and financial stability risks, with structural constraints limiting room for further rate cuts.

December 18, 2024

The Bank of Thailand unanimously maintained the policy rate at 2.25%, aligning with consensus expectations, citing alignment with economic potential and inflation within target expectations.
Economic growth projections for 2024–2025 remain steady, but uneven sectoral recovery, particularly in manufacturing and SMEs, presents ongoing risks to sustainable recovery.
Global economic uncertainties, credit growth trends, and the efficacy of government debt-relief programmes in supporting domestic demand and financial stability will influence future policy decisions.

October 16, 2024

The Bank of Thailand’s unexpected 25bp rate cut to 2.25% signals a dovish shift to support debt servicing, contrary to the consensus of no change.
Future policy will hinge on inflation developments, particularly the gradual rise towards the target range, plus sectoral economic growth disparities.
Credit conditions, debt deleveraging, and global monetary trends will influence the central bank's rate trajectory.

August 21, 2024

The Bank of Thailand maintained the Policy Rate at 2.5% by a 6 to 1 vote, reflecting confidence that current monetary policy is appropriate for balancing economic recovery and inflation management despite underlying structural challenges.
Economic growth is driven by tourism and domestic demand. Uneven recovery across sectors and structural headwinds in exports and manufacturing necessitate close monitoring of risks to private investment and consumption.
Inflation is expected to return to the target range by the end of 2024, with concerns over credit quality deterioration in SMEs and households prompting the Committee to support targeted measures aimed at maintaining financial stability.