Financial News: Thai Central Bank Cuts Rate By 25 Bps

Thai Central Bank Cuts Rate By 25 Bps

12/17/2025 - 04:22:00 (RTTNews)

(RTTNews) - Thailand's central bank lowered its key interest rate by a quarter-point on Wednesday as economic growth is forecast to moderate further amid subdued inflation.

The Monetary Policy Committee of the Bank of Thailand unanimously decided to cut the policy rate by 25 basis points to 1.25 percent from 1.50 percent.

Previously, the bank had lowered the policy rate by 25 basis points each in August, April and February.

"The Committee assesses that, given apparent economic slowdown as well as heightened risks, monetary policy can be more accommodative to ensure that financial conditions support economic recovery and alleviate debt burden of vulnerable groups as well as enhance the effectiveness of other financial measures and government policies," the bank said in a statement.

The bank observed that GDP growth slowed down in the second half of the year due to temporary factors in the manufacturing sector, a decrease in short-haul tourists, and flooding in the south.

GDP growth is forecast to soften in 2026 due to weaker private consumption and moderation in exports. The bank projected the economy to expand 2.2 percent in 2025, 1.5 percent next year and 2.3 percent in 2027.

Regarding prices, the bank noted that headline inflation will gradually return to the target by the first half of 2027. Consumer prices are forecast to fall 0.1 percent in 2025 and to climb 0.3 percent next year and 1.0 percent in 2027.

Core inflation is expected to remain stable at 0.8 percent each in 2025 and 2026 and rise to 1.0 percent in 2027.

The MPC said it stands ready to adjust monetary policy as appropriate in line with evolving economic and inflation outlook.

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