In the latest meeting of the Monetary Policy Committee (MPC), a decision was made by a vote of 5 to 2 to maintain the policy interest rate at 2.50% per annum.
The discussion included considerations for a 0.25% per annum rate cut, opposed by two votes. This reflects the assessment of the Thai economy, which is experiencing a slowdown in expansion due to global demand and the slow recovery of the Chinese economy, as well as structural factors affecting industrial goods exports and tourism.
The MPC stated that the Thai economy is expected to experience a deceleration in growth this year, resulting from the slow recovery of the export and production sectors. Consequently, the overall economic growth for the year is expected to be in the range of 2.5-3%. However, domestic demand continues to be a key driver, particularly from private consumption and the tourism sector, which remain in continuous expansion.
It also indicated that the inflation rate in the country remains low, although there is a tendency for it to increase to the target range slower than anticipated. Supply-side factors, such as fresh food and energy prices, along with government measures to assist with the cost of living, play a significant role in keeping inflation rates low.
In terms of the financial system, commercial banks and the debt securities market remain stable, with banks having strong levels of capital and reserves. Attention has been given to the credit quality of SMEs and households with slow income recovery to support sustainable recovery.
The MPC also emphasized the importance of maintaining price stability and sustainable growth of the Thai economy, noting that monetary policy will be adjusted appropriately in line with economic and inflation trends.