Bank of Thailand Governor Sethaput Suthiwartnarueput stated at a business forum on Wednesday that the Monetary Policy Committee makes decisions regarding interest rates based on the country’s economic outlook.
He highlighted that adjustments would be made if there were changes in the current assessment, noting that the policy interest rate of 2.5% ranks among the lowest globally, and identified structural factors as impeding the country’s economic growth.
The Bank of Thailand forecasts a 2.6% growth for Southeast Asia’s second-largest economy this year, with an expected increase to 3% in 2025, noting an uneven recovery. Suthiwartnarueput expressed dissatisfaction with these figures, emphasizing the need for higher economic growth rates to improve living standards and welfare.
Despite government pressure for a rate cut, the central bank kept interest rates unchanged for the fifth consecutive meeting last week. The next rate review is scheduled for October 16.
Suthiwartnarueput emphasized the importance of maintaining ‘policy optionality’ to preserve resilience in the face of uncertainties and shocks, suggesting readiness to adjust rates if the economic outlook shifts.
While tourism has shown growth, other sectors such as manufacturing have experienced slower growth, attributed to structural issues including demographic changes. The central bank is also monitoring signs of deteriorating credit quality, particularly in the small and medium-sized enterprise (SME) segment, and is attentive to a potential credit contraction.
In addition, BOT acknowledged that reducing the household debt-to-GDP ratio from its current level above 90% to the preferred 80% would require time and effort.
