# Thai Central Bank Anticipates Steady Economic Growth Despite Uncertainties

- Link: https://www.thailand-business-news.com/banking/184626-thai-central-bank-anticipates-steady-economic-growth-despite-uncertainties
- Published: 2025-01-03T08:19:00+07:00
- Author: Jessica Lee

Thailand’s economy is projected to expand by 2.7% in 2024 and 2.9% in 2025, fueled
by growth in tourism, private consumption, and exports of electronics and machinery.
However, the recovery in the industrial sector, particularly automotive manufacturing,
remains slow, contributing to disparities in household income growth.

## Key Takeways

 * The Monetary Policy Committee (MPC) maintained the policy interest rate at 2.25%
   to support economic stability. The MPC noted inflation aligns with their targets
   and highlighted the importance of a strong monetary framework to manage growing
   uncertainties.
 * Thailand‘s economy is anticipated to grow by 2.7% in 2024 and 2.9% in 2025, led
   by tourism, private consumption, and electronics exports. However, industrial
   sector recovery is slow, particularly in automotive manufacturing, causing household
   income disparities.
 * Inflation is expected to remain below target, with forecasts at 0.4% in 2024 
   and 1.1% in 2025, due to stable oil prices. Credit growth has slowed, non-performing
   loans have risen post-COVID-19 relief, and the EV market impacts automotive loans.
   The MPC monitors credit and government debt relief programs.

The Monetary Policy Committee (MPC) wrapped up its final 2024 meeting, opting to
hold the policy interest rate steady at 2.25% per annum. This decision is intended
to foster long-term economic stability, as inflation aligns with the target. The
MPC highlighted the importance of a robust monetary policy to counter rising uncertainties.

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Thailand’s economy is anticipated to grow by 2.7% in 2024 and 2.9% in 2025, driven
by advancements in tourism, private consumption, and exports of electronics and 
machinery. Despite these positive trends, the industrial sector recovery remains
sluggish, especially in automotive manufacturing, impacting household income growth
disparities.Thailand’s government is expected to implement supportive fiscal policies
to stimulate economic activity, focusing on infrastructure development and incentives
for foreign investment.

However, external risks such as global economic uncertainty and geopolitical tensions
could pose challenges to export performance. Additionally, structural issues like
labor shortages and uneven regional development may hinder long-term growth prospects,
requiring targeted reforms to enhance productivity and competitiveness across sectors.

Inflation is expected to stay low, at 0.4% in 2024 and 1.1% in 2025, thanks to stable
global oil prices. However, global trade policies and geopolitical risks pose ongoing
economic uncertainties.

Credit growth has decelerated, reflecting reduced investment in key sectors, while
non-performing loans (NPLs) have risen post-COVID-19 relief. The increasing prevalence
of electric vehicles (EVs) has impacted the automotive loan market, with SMEs in
high-risk industries facing tougher credit conditions.

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The MPC is actively monitoring credit expansion and government initiatives, such
as the “Khunsoo Rao Chuay” program, designed to alleviate debt for vulnerable groups,
support financial stability, and aid sectors under economic pressure.

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