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Thailand: 25bp Rate Cut To 1.75% (Consensus 1.75%) in Apr-25

• The Bank of Thailand cut the policy rate by 25bps to 1.75%, in line with market expectations, in response to increasing downside risks from global trade tensions and weaker domestic growth prospects.
• The central bank projects that Thai GDP growth could slow to between 1.3% and 2.0% in 2025, depending on tariff scenarios, while headline inflation falls below the target range, reflecting persistent disinflationary pressures.
• Future rate decisions will depend on global trade developments, domestic credit conditions, and the inflation trajectory, with monetary policy likely to remain accommodative amid heightened external uncertainty.

EA: Easing Stagflationary Noise

• Hard economic data must match gloomy sentiment to justify ECB rate cuts reaching a stimulative setting. The little evidence available so far doesn’t show much of a shock.
• Bank lending growth kept rising for companies and households in March as monetary conditions appear to be loosening, not tightening, due to the initial tariff shock.
• Activity surveys only softened slightly in services, while inflation expectations are broadly high. Failure to see much more stagflation eases the likelihood that it occurs.

By Philip Rush