Abstract
The majority of the Monetary Policy Committee (MPC) voted to maintain the policy rate at 2.50% to safeguard macro-financial stability, while two members wanted to cut it by 0.25% to address structural challenges. The MPC projects higher economic growth of 2.6% in 2024 and 3.0% in 2025. They expect headline inflation to be 0.6% in 2024 and 1.3% in 2025, gradually increasing towards the target range. The MPC also notes stable overall financial conditions but identifies tighter credit conditions for certain groups. They highlight uncertainties in the economy from export recovery, government spending, and fiscal stimulus.
Summary
The MPC Decision
The Monetary Policy Committee (MPC) voted 5 to 2 to maintain the policy rate at 2.50%, with two members advocating for a 0.25% rate cut. The majority sees the current rate as vital for macro-financial stability, while also addressing concerns about high household debt and the need for deleveraging to reduce system vulnerabilities in the long term.
Economic Projections
The MPC forecasts the Thai economy to grow by 2.6% in 2024 and 3.0% in 2025. Post-COVID-19, economic growth has been impacted by structural challenges affecting the nation’s potential. Inflation is expected to be at 0.6% and 1.3% in 2024 and 2025 respectively, influenced by raw food prices and government subsidies.
*For more detailed information, you can refer to the full report here.*
Source : SCB EIC expects the MPC to cut policy rate 2 times this year starting at the June Meeting
