# SCB EIC Anticipates Possibility of Further Rate Cuts This Year

- Link: https://www.thailand-business-news.com/banking/198862-scb-eic-anticipates-possibility-of-further-rate-cuts-this-year
- Published: 2025-03-04T10:37:36+07:00
- Author: Akanksha Singh

**SCB EIC anticipates the MPC to implement an additional rate cut by Q1 2025 to 
further alleviate financial conditions amid ongoing economic and credit slowdowns.**

**SCB EIC also highlights that such a move would aim to support domestic consumption
and investment while maintaining financial stability. This decision is expected 
to align with global monetary trends, as central banks worldwide continue to adopt
accommodative policies to counteract sluggish economic recovery. **

ADVERTISEMENT

## Key Takeaways

 * The Monetary Policy Committee (MPC) voted to lower the policy interest rate by
   0.25 percentage points to 2.0%, with one member voting to maintain the rate, 
   in response to Thailand’s economic growth likely falling short of previous projections
   due to structural issues, particularly in the manufacturing sector.
 * The MPC revised its economic outlook for 2025, expecting GDP growth to be only“
   a bit above” the previous year’s growth of 2.5%YoY, attributing this to the manufacturing
   sector’s competitiveness challenges and potential downside risks from trade policies
   of major economies.
 * The MPC emphasizes that the rate cut is a recalibration of monetary policy stance
   to ease financial conditions in line with Thailand’s weaker growth outlook, and
   not the beginning of an easing cycle, with the policy rate at 2% considered neutral
   for the economy.
 * Additionally, the rate cut could provide relief to households and businesses 
   facing higher debt burdens, fostering a more conducive environment for growth.

## Monetary Policy Decision

The Monetary Policy Committee (MPC) voted 6 to 1 to reduce the policy interest rate
by 0.25 percentage points to 2.0%. This decision reflects concerns regarding Thailand’s
economic growth, which is projected to fall short due to structural issues in the
manufacturing sector, facing intense foreign competition. The MPC also noted increased
risks stemming from aggressive U.S. trade measures and tight domestic financial 
conditions, particularly for SMEs.

## Economic Outlook

The MPC now forecasts a weaker economy for 2024, adjusting growth expectations down
from 2.7% to 2.5% YoY. Despite strong private consumption and merchandise exports,
challenges within the manufacturing sector hinder overall growth. The committee 
also revised its 2025 GDP growth projection to slightly above 2024’s level, while
acknowledging external trade policy risks affecting the economy.

### Related**Posts**

###  󠀁[USD to THB Exchange Rate Today: Thai Baht Moves with Global Market Trends](https://www.thailand-business-news.com/banking/331689-usd-to-thb-exchange-rate-today-thai-baht-moves-with-global-market-trends)󠁿

###  󠀁[Bank of Thailand Unveils Framework to Shield Financial Sector from Illicit Activities](https://www.thailand-business-news.com/banking/328409-bank-of-thailand-unveils-framework-to-shield-financial-sector-from-illicit-activities)󠁿

###  󠀁[Tokenised Deposits vs Stablecoins: Why Thailand’s Cautious Path Differs from Hong Kong and Singapore](https://www.thailand-business-news.com/banking/321239-tokenised-deposits-vs-stablecoins-why-thailands-cautious-path-differs-from-hong-kong-and-singapore)󠁿

###  󠀁[Thailand’s economy in July saw growth, boosted by the momentum of the global technology and AI cycle](https://www.thailand-business-news.com/banking/326128-the-thai-economy-in-july-expanded-from-the-previous-month)󠁿

## Inflation and Financial Stability

Inflation and financial stability outlooks remain largely unchanged. Headline inflation
is expected to stay at the lower end of the target range, although commodity price
fluctuations present downside risks. STM lending continues to decline due to heightened
competition against foreign goods, coupled with increasing household vulnerabilities.
The MPC emphasizes that the rate cut is a recalibrated monetary policy response,
aimed at improving financial conditions without initiating an easing cycle.

[Source link ](https://www.scbeic.com/en/detail/product/9729?rand=55232)