11 July 2024

The Bank of Thailand’s Monetary Policy Committee (MPC) has unanimously voted to increase the key interest rate by 0.25%, to 1.00%, with immediate effect.

The central bank said, in a statement today (Wednesday), that the Thai economy continues its steady recovery, thanks to the improved tourism sector and increased consumption by the private sector.

It said that inflation remains high due to increased production costs, despite an easing in the demand pressure from prices of consumer products.

The overall growth and inflation outlooks are consistent with the previous assessment. As such, the MPC found it appropriate to increase the key interest rate by 0.25% at its meeting today.

According to the central bank, Thailand’s economic growth will 3.3% this year and 3.8% next, fuelled mainly by the tourism and private consumption sectors.

Inflation this year and next is expected to be 6.3% and 2.6% respectively and is likely to reduce in line with falling global energy prices and the easing of supply chain problems.

The central bank said that the overall financial system is stable, as commercial banks have high levels of capital reserves, while the debt servicing ability of the private sector and households has improved in line with economic recovery.

The central bank also said that it may make further and appropriate adjustments to the key interest rate in the future, if there are changes to the economic outlook and inflation rate.