Abstract
The MPC maintained the policy rate at 2.25% in line with SCB EIC’s projections, citing economic trajectory and inflation returning to target range. Thai GDP growth projections remain stable at 2.7% in 2024 and 2.9% in 2025, but challenges increase due to global competition and policy uncertainties. Inflation expectations are revised slightly downward. The MPC takes a more hawkish stance, focusing on structural issues affecting specific sectors like SMEs and automotive. Credit growth slowdown is attributed to loan repayments and subdued demand, with limited concern for household vulnerabilities.
Summary
MPC Maintains Policy Rate at 2.25%
The MPC voted unanimously to keep the policy rate at 2.25%, in line with SCB EIC’s forecasts. They believe this rate supports economic growth and keeps inflation in check, providing stability amidst global uncertainties. Maintaining this rate allows flexibility for potential future challenges.
Economic and Inflation Outlook
The MPC projects Thai GDP growth at 2.7% in 2024 and 2.9% in 2025. However, they anticipate increased economic challenges due to global competition and policy uncertainties. Inflation is expected to return to target levels, with projections slightly adjusted downward for 2024 and 2025.
MPC’s Stance and Concerns
Despite a more hawkish stance, the MPC remains optimistic about the economy, attributing challenges to structural issues. They are less worried about credit growth slowdowns, linking them to specific sector dynamics. Household vulnerabilities and debt deleveraging were not major points of discussion, possibly due to ongoing initiatives by the Bank of Thailand.
Source : SCB EIC anticipates that the MPC still has room to lower the policy rate again next year.
