Thailand's economy projected to grow over 2.5% this year

Thailand's economy is expected to grow slightly more than 2.5% this year, according to the Bank of Thailand (BoT). This prediction is lower than earlier forecasts. The BoT shared these insights in the minutes from its monetary policy meeting held on February 26. During the meeting, the BoT decided to cut the one-day repurchase rate by 0.25% to 2.00%. This decision was made by a vote of 6-1. One member of the committee wanted to keep the rate unchanged. The rate cut is surprising, following a hold in December and a similar reduction in October. The BoT noted that while tourism and exports are doing well, other sectors, especially manufacturing, are struggling. The automotive and real estate industries are facing significant issues. The committee believes that these challenges are structural and require changes in policy. Thailand's household debt is quite high, totaling 16.34 trillion baht (about $486 billion) at the end of September 2024. This amount represents 89% of the country's gross domestic product. The government is concerned that high household debt is limiting consumption and economic growth. The BoT's chief emphasized that interest rates will not be changed frequently and that they believe the current rate is appropriate given the economic situation. The government aims for a growth target of 3% this year and plans to stimulate the economy with a $4.4 billion package. Last year, Thailand's economy grew by 2.5%, which was slower compared to other countries in the region. The next review of interest rates by the BoT is scheduled for April 30.