3-12-2024 (BANGKOK) Thailand’s Finance Minister has indicated fresh support for an interest rate reduction, citing low inflation levels and the need to boost economic growth in Southeast Asia’s second-largest economy.
Speaking at a business forum on Tuesday, Pichai Chunhavajira emphasised the importance of coordinated monetary and fiscal policies to achieve the government’s ambitious growth targets. The minister projected economic growth of between 2.6 and 2.8 per cent for the current year, with potential to reach 4 to 5 per cent in 2025 under proper policy coordination.
Pichai also expressed his preference for a weaker baht, suggesting that a softer currency would benefit the export-dependent economy. However, he acknowledged that any decision on interest rates ultimately rests with the Bank of Thailand’s (BOT) monetary policy committee.
The central bank surprised markets in October with its first rate cut since the pandemic, reducing the key policy rate by 25 basis points to 2.25 per cent. The next policy review is scheduled for 18 December, with mounting speculation about further easing following recent support from the International Monetary Fund for additional rate cuts to aid Thailand’s economic recovery.
