The Bank of Thailand kept its benchmark interest rate steady at 1.00%, as anticipated, stating it will keep an eye on inflation trends and expectations. The seven-member Monetary Policy Committee (MPC) voted unanimously on the decision.
The Monetary Policy Committee (MPC) unanimously voted 7:0 to maintain the policy interest rate at 1.0%. The committee viewed the policy interest rate as appropriately accommodative given Thailand’s low and uneven economic growth, continued contraction in retail lending, and a declining trend in SME lending.
The MPC projected a decline in inflation by 2027 as supply-side pressures, such as energy and fresh food prices, gradually ease. Looking ahead, the MPC will monitor the price pass-through of businesses facing higher costs, medium-term inflation forecasts, and the debt repayment capacity of SMEs and vulnerable households.
The Thai economy is projected to expand at a faster rate than previously estimated, but the growth rate is low and uneven, the MPC said in a statement.
The Thai economy is projected to grow better than previously estimated.
- The Monetary Policy Committee (MPC) has revised its GDP forecast for this year upwards to 2.3% year-on-year (YOY) from the previous 1.5% YOY (excluding government measures) and 2.0% YOY (including government measures). This revision is based on…
- Export and investment momentum driven by the Tech & AI Cycle exceeded expectations , with growth concentrated in technology-related exports and investments in digital businesses.
- The impact of the war was less than expected, as large businesses were able to adapt by diversifying their import sources and transportation routes for raw materials, while the government provided subsidies to mitigate energy costs.
- Government measures to mitigate the impact of the energy crisis, under the Emergency Decree on Borrowing 400 billion baht.
- The Monetary Policy Committee (MPC) still views Thailand’s economic growth in both 2026 and 2027 as below its potential and uneven, particularly affecting households where purchasing power is pressured by high living costs while incomes are slowing, and SMEs which face difficulties adjusting to costs and have limited access to credit.
- The Monetary Policy Committee (MPC) projects Thailand’s current account balance for the full year 2026 to worsen to a balanced level ($0 billion USD, down from the previous estimate of $7 billion USD). This is attributed to temporary factors, including significantly higher crude oil prices and seasonal profit repatriation by multinational corporations, which are expected to contribute to the deficit in the second quarter. However, the MPC anticipates a gradual improvement back to a surplus in the second half of 2026 and throughout 2027.
The Thai baht has slipped as the US dollar strengthens, matching market expectations that the Federal Reserve will raise interest rates later this year, according to the MPC.
