Thailand may implement significant interest rate cuts soon

The Bank of Thailand may soon begin significant interest rate cuts to help the struggling economy. Analysts believe these cuts could be the most aggressive in Southeast Asia as the country's growth outlook worsens. The central bank has previously resisted cutting rates, but pressure is mounting due to a weak economy and ongoing political challenges. Some experts predict the bank could cut rates by up to 100 basis points over the next year. Others expect a reduction of 75 basis points by 2026. Thailand has faced several economic issues, including a slow recovery from the pandemic, high household debt, and a fading tourism sector. Many analysts predict the first rate cut might happen in June, but there is speculation that action could occur as early as next month. Recent meetings indicated that the central bank is concerned about economic risks and may soften its stance on rate cuts. The ongoing trade war with the US poses additional challenges for Thailand's export sector, potentially reducing GDP growth. The central bank has estimated this conflict could cut growth by up to half a percentage point this year. These external challenges, combined with domestic issues like high consumer debt, have left many households struggling. The Thai government and the central bank are working on measures to support the economy. Recently, the central bank announced it would ease mortgage rules, while the Finance Ministry plans to address consumer and credit card loans. However, some experts argue that a more substantial rate cut could have a broader impact in stimulating the economy.