Bangkok: Thailand's Monetary Policy Committee (MPC) voted unanimously 6-0 on Wednesday to maintain the policy interest rate at 1.00% per annum. The committee assessed that the current rate is appropriate for an economy facing a slowdown and high uncertainty, while noting that the recent rise in inflation is primarily driven by supply-side factors.
According to Thai News Agency, the central bank projected the Thai economy to grow at a slower pace of 1.5% in 2026 and 2.0% in 2027, down from previous assessments. This downward trend is attributed to the conflict in the Middle East, which has increased costs for businesses and reduced household purchasing power.
Furthermore, foreign tourist arrivals are expected to reach 33 million this year and 35.5 million in 2027, as the industry faces higher travel costs and restrictions. MPC Secretary Don Nakornthab stated that headline inflation is expected to average 2.9% in 2026, potentially exceeding the upper target bound of 3.0% for a period due to global energy prices, before easing to 1.5% in 2027.
The BOT will continue to monitor risks from a prolonged war and potential supply chain disruptions that could severely impact manufacturing and employment.