# Bank of Thailand keeps policy interest rate at 2.50 percent

- Link: https://www.thailand-business-news.com/banking/114776-bank-of-thailand-keeps-policy-interest-rate-at-2-50-percent
- Published: 2023-11-29T15:16:16+07:00
- Author: Olivier Languepin

The Bank of Thailand has announced that it will maintain the policy interest rate
at 2.50 percent.

## Key Takeaways

 * The Monetary Policy Committee in Thailand has decided to maintain the policy 
   rate at 2.50 percent, considering the current economic recovery and its impact
   on inflation and financial stability.
 * The Thai economy is expected to experience more balanced growth in the coming
   years, driven by domestic demand, the tourism sector, and a recovery in merchandise
   exports.
 * Inflation is projected to increase next year, in line with the economic recovery
   and supply pressures, but it is expected to remain within the target range.

Despite a slowdown in merchandise exports, the Thai economy is continuing to recover,
supported by domestic demand, the tourism sector, and a recovery in exports. Inflation
is expected to increase next year due to economic recovery and supply pressure.

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## Headline inflation is projected to stay within the target range

The overall financial system remains resilient, but there is a need to monitor credit
quality for certain sectors. Financial conditions have tightened somewhat, but it
is not hindering the economic recovery. The Committee expects the Thai economy to
gradually recover and inflation to be within the target range.

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## The Committee projects growth of 2.4 percent in 2023 and 3.2 percent in 2024

The Committee projects a growth rate of 2.4 percent in 2023 and 3.2 percent in 2024.
However, when taking into account the government’s digital wallet scheme, the growth
projection for 2024 is revised to 3.8 percent, down from the previous assessment
of 4.4 percent. The overall trajectory of the economy indicates a steady recovery,
driven by a strong expansion in private consumption, particularly in the services
sector, as well as improvements in employment and labor income.

## Merchandise exports and tourism has been slower than anticipated

However, the recovery of merchandise exports and tourism has been slower than anticipated,
mainly due to sluggish growth in China and a delayed rebound in global electronic
demand. Looking ahead, it is expected that growth will become more balanced as tourism
continues to recover and merchandise exports start to expand. Nonetheless, it is
important to note that certain structural obstacles may limit the positive impact
of the global demand recovery on Thai exports.