Bangkok – The Bank of Thailand announced that it will keep its key policy rate at 1.00% for now, saying there is no rush to raise interest rates. Governor Vitai Ratanakorn addressed a business forum on Thursday, emphasizing that monetary policy alone cannot solve the structural challenges holding back the country’s growth.
Growth outlook
Vitai projected that Thailand’s economy will expand roughly 2.3% in 2026. He highlighted a stronger export outlook, with shipments expected to increase between 17% and 18% this year, up from the 14% growth recorded earlier in the year.
Inflation expectations
The central bank expects inflation to slow to around 2% in 2026, down from the June forecast of 2.8%. This easing is seen as a sign that price pressures are moderating, giving the bank room to maintain its accommodative stance.
Policy timeline
The next monetary‑policy review is scheduled for October 28. Until then, the bank will monitor both domestic demand and external factors, including global commodity prices and the performance of key trading partners.
Structural challenges
While the rate hold provides short‑term stability, Vitai warned that deeper structural issues—such as labor market mismatches and productivity gaps—remain unresolved. He called for reforms that can boost investment, improve workforce skills, and enhance the business environment.
Overall, the Bank of Thailand’s decision reflects a cautious optimism: keeping rates steady to support growth while waiting for structural reforms to take effect.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
