BANGKOK, June 24 (Xinhua) -- Thailand's central bank left its key interest rate unchanged for a second consecutive meeting on Wednesday as policymakers expect the economy to expand faster than anticipated, despite facing low and uneven growth across different sectors.
The Bank of Thailand's monetary policy committee voted unanimously to maintain the one-day repurchase rate at 1 percent, keeping borrowing costs at their lowest level since September 2022, to support ongoing economic recovery under an accommodative stance.
The Thai economy is now projected to grow by 2.3 percent this year and 1.8 percent in 2027, driven by a stronger trajectory in merchandise exports and private investment due to the global technology and artificial intelligence cycle, government relief measures mitigating the energy crisis, and an improvement in the Middle East conflict, the central bank said in a statement.
The realized impact of regional tensions on manufacturing and tourism has proven less severe than previously forecast, with large businesses demonstrating greater adaptability than anticipated, while small- and medium-sized enterprises (SMEs) continue to face intense competition and structural limitations, said Don Nakornthab, secretary of the policy committee.
Furthermore, private consumption faces headwinds as household purchasing power is squeezed by decelerating income growth and high living costs, which are expected to weigh more heavily once government relief measures phase out, Don told a news conference.
The central bank said headline inflation is forecast to average 2.8 percent this year before declining to 1.4 percent in 2027 as supply-side pressures gradually ease, with medium-term inflation expectations remaining anchored within the target range of 1-3 percent.
He also noted that while overall credit quality and financial system interest rates remain stable, SME loans continue to contract, prompting the central bank to emphasize the necessity of targeted financial measures to assist vulnerable households and smaller businesses. ■