low angle shot of tall buildings with glass exterior

The MPC voted unanimously to raise the policy rate by 0.25% as expected, expecting the Thai economy to continue to grow

The Monetary Policy Committee (MPC) of Thailand has voted unanimously to increase the policy rate by 0.25%, as expected. The decision was made due to economic and inflation trends aligning with the policy rate hike. The new rate is now 1.75%, up from 1.50%, effective immediately.

The MPC predicts that the Thai economy will grow by 3.6% this year with inflation at 2.9%, while the Thai economy is expected to continue expanding at around 3.8% in 2024, with inflation dropping to 2.4%. The tourism sector and private consumption are expected to be the primary drivers of economic growth, with merchandise exports starting to show signs of recovery from contractions in the previous period.

However, the global economy has become more uncertain due to inflation trends and financial institution problems in major economies. Although headline inflation is expected to return to the target range in the middle of this year, core inflation remained high, and there was a high risk of cost transmission and demand-side inflationary pressures. The MPC viewed that the continued policy rate hike was in line with economic and inflation trends, which is why they decided to increase the rate at this meeting.

Overall, the Thai economy is expected to grow continuously, with headline inflation returning to the target range in mid-2023. Core inflation is also expected to decline gradually over the years, reaching 2.0% in 2024.

Leave a Reply

%d bloggers like this: