Yesterday, Thailand’s central bank governor has highlighted the pressing need for stability, issuing a warning about an impending “storm” stemming from an escalating global trade conflict.
This cautionary note was made a day ahead of the expected cut in the policy interest rate by the nation’s monetary policy committee. Bank of Thailand Governor Sethaput Suthiwartnarueput expressed concern over stability, noting the clear signs of an approaching storm linked to the trade war. While the issue remains unresolved and its impact uncertain, he stressed the evident need to focus on stability.
Thailand, as Southeast Asia’s second-largest economy, is anticipated to be severely affected by the escalating trade war in Asia. Consequently, the International Monetary Fund has recently revised the country’s growth forecast for this year, lowering it by over a percentage point to 1.8%. With the looming threat of a 36% retaliatory tariff on its exports to the United States—Thailand’s largest market—analysts predict the central bank will reduce borrowing costs to stimulate economic growth.
In a survey conducted by Bloomberg, 81% of economists polled, or 17 out of 22, anticipate the Bank of Thailand (BOT) will reduce its policy rate from 2.00% to 1.75% at the upcoming Monetary Policy Committee (MPC) meeting on April 30. Meanwhile, the remaining 19% expect the rate to remain unchanged at 2.00%.
InnovestX Securities forecasts that the BOT will cut interest rates three times in 2025, starting with the upcoming meeting’s expected reduction to 1.75%. This outlook reflects a shift in the central bank’s focus, highlighted in the recent meeting summary (1/2025), toward expanding economic risks amid clear signs of economic slowdown and escalating trade war. The analyst projects these factors could lead to a 3% contraction in Thai exports this year.
As for Finansia Syrus Securities (FSS), the analyst notes a similar suggestion. As the MPC meeting approaches, expectations rise for the BOT to lower the interest rate from 2% to 1.75%. The move is anticipated due to a likely revision of Thailand’s 2025 GDP growth forecast from February’s 2.6% to below 2%.
Furthermore, there is also a possibility of an additional rate cut to 1.5% in the latter half of 2025, influenced by clearer impacts from the global tariffs.
