# SCB EIC Expects Bank of Thailand to Begin Rate Cuts in Q4

- Link: https://www.thailand-business-news.com/banking/159123-scb-eic-expects-bank-of-thailand-to-begin-rate-cuts-in-q4
- Published: 2024-09-02T07:45:00+07:00
- Author: News Desk

**The MPC voted 6-1 to maintain the policy rate at 2.50%. They projected slow domestic
demand and tighter financial conditions. SCB EIC anticipates rate cuts to 2.25% 
in late 2024, and 2% in early 2025.**

The Monetary Policy Committee (MPC) has decided to keep the policy rate at 2.50%,
with a 6 to 1 vote supporting this choice. One member advocated for a 0.25 percentage
point cut. While the Thai economy is growing as projected, recent data shows a slight
dip in headline inflation primarily driven by supply-side factors. The MPC expressed
concerns about domestic demand’s potential slowdown and uneven recovery among sectors,
particularly in manufacturing, which may affect future credit quality and lending
standards.

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Looking ahead, SCB EIC anticipates two rate cuts, with the policy rate falling to
2.25% in late 2024 and 2% in early 2025. These adjustments aim to ease tightening
financial conditions, especially for households and businesses, which could further
hinder domestic demand. Uncertainties in 2024 may necessitate more active monetary
policies to sustain economic momentum.

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Recent economic indicators reflect this cautious sentiment, with signs of weakening
domestic demand emerging in GDP growth figures. Headline inflation remains below
target, and core inflation shows persistent weakness. With households facing stricter
lending standards, borrowing capacity is diminishing. Given these dynamics, SCB 
EIC predicts that the MPC will likely cut rates by year-end to support the economy
amidst growing external challenges and uncertainties in domestic policies.

[Source link ](https://www.scbeic.com/en/detail/product/9573?rand=55232)