Thai Enquirer
Thailand Holds Policy Rate at 1% as Expected
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◌ Single Source
Thailand’s Monetary Policy Committee unanimously voted to keep the policy interest rate unchanged at 1.00% on Wednesday, in line with market expectations, saying the current accommodative stance remained appropriate to support the economic recovery.
Key facts
- The Bank of Thailand said the economy was growing broadly in line with its previous forecasts of 2.3% in 2026 and 1.8% in 2027
- SCB EIC raised its GDP growth forecasts to 2.2% for 2026 from 2.0% and to 2.1% for 2027 from 1.9%
- In June, it projected headline inflation of 2.8% in 2026 and 1.4% in 2027, but released no revised figures on Wednesday
- SCB EIC cut its 2026 inflation forecast to 1.7% from 2.6% and expects it to fall to 0.8% in 2027, while Kasikorn Research Centre expects inflation to average 1.8% this year.
- Both SCB EIC and Kasikorn Research expect the MPC to keep the policy rate at 1.00% throughout 2026, citing weaker inflationary pressure, an uneven recovery and the need to preserve policy space
- Thailand’s GDP grew by 1.9% year-on-year in the second quarter, with the recovery remaining concentrated in investment and technology-related exports while domestic demand and manufacturing stayed weak.
Summary
The Bank of Thailand said the economy was growing broadly in line with its previous forecasts of 2.3% in 2026 and 1.8% in 2027. Exports and private investment have performed better than expected, supported by the technology and artificial intelligence cycle, but their reliance on imported inputs has limited benefits for the wider economy.
Private consumption has expanded more slowly than anticipated as households remain cautious amid rising living costs. Thailand’s GDP grew by 1.9% year-on-year in the second quarter, with the recovery remaining concentrated in investment and technology-related exports while domestic demand and manufacturing stayed weak.