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Thailand: 25bp Rate Cut To 2.25% (consensus 2.5%) in Oct-24

• 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.

Thailand Policy Rate 2.5% (consensus 2.5%) in Aug-24

• 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.

Thailand Policy Rate 2.5% (consensus 2.5%) in Jun-24

• The Bank of Thailand maintained its Policy Rate at 2.5%, with a 6 to 1 vote, reflecting a cautious approach amid structural challenges and ongoing economic uncertainties, particularly in the export sector.
• It projects economic growth at 2.6% in 2024 and 3.0% in 2025, driven by strong domestic demand, tourism recovery, and accelerated government disbursements, while structural impediments continue to weigh on export performance.
• Inflation should gradually increase towards the target range by the fourth quarter of 2024, with headline inflation projected at 0.6% for 2024 and 1.3% for 2025, necessitating careful monitoring of external and domestic factors that could influence inflation dynamics and future policy decisions.

Thailand CPI Inflation 1.54% y-o-y (consensus 1.2%) in May-24

- Thailand's CPI inflation in May 2024 was 1.54% year-on-year, higher than consensus estimates and indicative of increasing consumer demand and price pressures.
- Core CPI inflation languished at 0.39% year-on-year, but goods pipeline pressures are boosting the headline, as 3.36% PPI inflation in April 2024 demonstrates.