The government is still advocating for a higher inflation target that could lead to increased prices, Finance Minister Pichai Chunhavajira stated on Thursday, following the Bank of Thailand’s (BoT) unexpected interest rate cut a day earlier.
Mr. Pichai informed reporters that the rate cut announced on Wednesday is intended to boost liquidity and restore confidence.
The BoT unexpectedly lowered its key interest rate by 25 basis points to 2.25%, marking the first reduction since 2020, after the government had repeatedly urged for a policy easing to help revive Southeast Asia’s second-largest economy.
The finance minister emphasized that the central bank should take into account the interest rate trends in other countries when making future rate decisions.
However, he expressed a desire for a higher inflation target for 2025, planning to discuss the current inflation target of 1% to 3% with the central bank within this month.
“A higher inflation target will help drive up inflation, as it is evident that inflation has not yet met the target this year,” the minister noted.
“We want to see inflation levels higher than they are now,” he added, indicating uncertainty about whether inflation would reach the target by 2025.
As of September, annual headline inflation was recorded at just 0.61%.
