The Bank of Thailand's Monetary Policy Committee voted six to one on 26 February 2025 to cut the policy interest rate by 25 basis points to 2.00%, the central bank announced on its website. The committee said the economy was projected to expand more slowly than anticipated, owing to structural problems in manufacturing and competition from imported goods, and faced heightened risks from major economies' trade policies; most members judged that a cut would align financial conditions with the economic and inflation outlook and help cope with rising downside risks.
This was the first rate adjustment by the Bank of Thailand since October 2024, and the central bank said the adjustment does not constitute the beginning of a formal easing cycle. The committee did not indicate an intention to deliver a sequence of further reductions.
INFLATION
Headline inflation in Thailand was expected to stabilise around the lower bound of the Bank of Thailand's 1–3% target range.
The single dissenting member voted to hold, placing greater emphasis on preserving monetary policy space to deal with heightened uncertainties going forward. The committee said it would continue to monitor economic, financial and price developments closely.
GROWTH SLOWER THAN ANTICIPATED
The central bank said the economy slowed more than expected in 2024 because of a large inventory rundown, and that manufacturing faces structural problems and intense competition from imported goods, even as private consumption and services continue to expand. Tourism and domestic demand have continued to support growth, but they have not offset the weakness in manufacturing.