The Bank of Thailand’s monetary policy committee unanimously voted on Wednesday to increase the policy rate by 0.25 percentage point to 2%, with immediate effect.

Piti Disyatat, secretary of the committee, said they deemed it appropriate to continue the gradual policy normalisation, in light of the growth and inflation outlooks.

He said the committee is, however, prepared to adjust the size and timing of policy normalisation, should the evolving growth and inflation outlooks differ from the current situation.

The committee forecasts that economic growth will be 3.6% and 3.8% this year and in 2024 respectively, thanks to the tourism recovery, which should promote employment and labour incomes, in turn sustaining private consumption.

Exports are recovering consistent with expectations and should improve in line with a moderate expansion in global economic activity, said Piti, adding that inflation should gradually decline to a target range of between 2.5% and 2.4% this year and next year respectively, due to the easing of electricity charges and oil prices.

The overall financial system remains resilient, as financial institutions maintain high levels of capital and loan loss provision, and the debt serviceability by households and businesses has improved in tandem with economic recovery, said Piti.

Current financial conditions remain supportive of the ongoing recovery and mobilisation of funds by the private sector, he said, adding that the baht has depreciated against the US dollar, in part influenced by the Federal Reserve’s monetary policy outlook, the renminbi depreciation and domestic political uncertainty.