The Bank of Thailand’s Monetary Policy Committee decided unanimously today (Wednesday) to raise the key interest rate, with immediate effect, by 0.25% to 1.25%.

Piti Disyatat, spokesman for the committee, said that the latest adjustment of the key rate is in line with declining inflation and the steady increase in growth projection rate.

The economic growth rate is projected to reach 3.2% this year, 3.7% next year and 3.9% in 2024.

The general inflation rate, currently at 6.3% and which has passed its peak, is projected to drop to 3.0% next year and 2.1% in 2024. The basic inflation rate is projected to slow from 2.6% this year to 2.5% next year and 2% in 2024, said Piti, adding that the central bank will, however, closely monitor the inflation risk, especially that posed by the uncertainty over domestic energy prices, which can increase production costs.

The tourism sector is recovering, as clearly shown by the increasing number of foreign arrivals, and consumer consumption is picking up, thanks to increased employment and income, although exports have dropped.

Piti said that there is still considerable uncertainty over the global economic situation, which may slow down more than anticipated, and this could affect Thailand’s tourism recovery.

The Monetary Policy Committee will continue to monitor capital market and foreign exchange fluctuations closely.

Due to uncertainty over the global economic and monetary situations, and the possibility that they may vary from the projections, the committee is ready to make further adjustments to the key interest rate in the future, said Piti.