BANGKOK, Thailand – The Monetary Policy Committee (MPC) of the Bank of Thailand voted 5 to 2 to cut the policy interest rate by 0.25 percentage points—from 2.00% to 1.75% per year—with immediate effect. The decision was made in response to heightened global trade risks, a decline in foreign tourist arrivals, tightening credit conditions, and elevated uncertainty in the domestic and international economic outlook.
The committee stated that global trade policy, particularly U.S. measures and retaliatory actions by major economies, has begun to reshape the global economic and financial landscape. Although still in early stages, the situation remains highly uncertain and is expected to dampen global growth and disrupt trade and production structures in the long term.
Thailand’s economic outlook for 2025 has been revised downward. Under the base case scenario—assuming moderate trade tensions—GDP is forecast to grow by 2.0%. However, under a more severe trade conflict scenario, growth could fall to just 1.3%. The committee stressed the need to monitor global trade developments closely and adjust monetary policy in line with evolving risks.
Headline inflation is expected to fall below the target range due to lower global oil prices and domestic government measures. Although core inflation remains stable, trade protectionism and global supply chain restructuring could affect inflation trends going forward.
Financial conditions remain tight. Overall credit has contracted slightly, and loan quality has deteriorated, particularly in the housing and structurally vulnerable business sectors. The MPC also noted increased volatility in global and Thai financial markets, although domestic market mechanisms continue to function normally.
The committee concluded that monetary policy must be adapted as needed to maintain price stability, ensure sustainable economic growth, and safeguard financial system stability amid a highly uncertain environment.
