Sakkapop Panyanukul, Secretary of Thailand’s Monetary Policy Committee (MPC), announced on Wednesday (October 8) that the committee decided to keep the policy rate steady at 1.50%, with a voting split of 5 in favor and 2 against. The two dissenting members suggested a reduction of 0.25% to 1.25%.
The MPC forecasted moderate economic growth for Thailand, estimating 2.2% in 2025 and 1.6% in 2026. Growth is expected to be driven by manufacturing and exports, although US trade policies could dampen expansion in the latter half of 2025 and into 2026. The recovery of tourism and private consumption is anticipated to advance gradually, supported by government stimulus initiatives. Moreover, electronics exports are projected to remain robust.
The committee believes that an accommodative monetary policy is necessary to support the ongoing economic recovery. They noted that previous rate cuts are still being transmitted into the economy. While most members emphasized the importance of timing and effectiveness in monetary policy implementation, two members argued for further easing to create favorable financial conditions, support liquidity, and alleviate debt burdens on SMEs and vulnerable households.
Inflation is expected to be below previous estimates, with headline inflation forecasted at 0.0% in 2025 and 0.5% in 2026, primarily due to falling energy and food prices. However, the MPC considers deflation risks to be low, as most goods and services are expected to maintain price stability or see slight increases. Core inflation is projected to stay steady at 0.9% both years.
Despite the accommodative stance, the MPC observed that overall credit growth remains subdued, mainly due to cautious lending practices, especially toward SMEs and low-income households. The appreciation of the baht against the US dollar has also impacted exporters. The committee emphasized the importance of closely monitoring credit expansion and currency fluctuations.
The MPC reaffirmed its commitment to maintaining price stability and fostering sustainable economic growth. It will continue to evaluate macroeconomic developments and adjust its monetary policy as necessary to manage inflation and economic risks.