Thailand Holds Interest Rate at 1.00%, Raises Growth Forecasts for Next Two Years
Key Facts
Thailand’s central bank kept its one-day repurchase rate at 1.00% in its October 28 decision, with the Monetary Policy Committee voting unanimously to hold, Reuters reported. This was the fourth consecutive time the bank had left the rate unchanged. The committee said the current interest rate was appropriate to support the economic recovery. The decision comes as overall growth remains below its potential level, according to the bank’s assessment. At the same time, inflation had risen temporarily due to supply-side factors. The committee said the prevailing interest rate was appropriate to support the recovery under these circumstances.
The bank raised its forecast for Thailand’s economic growth to 2.4% in 2026, compared with its June estimate of 2.3%. It also expects growth of 2.1% in 2027, up from 1.8% in its previous forecast issued in June, Reuters reported. The revisions mean the bank’s estimates for both years have improved compared with its previous forecasts. But the bank maintained its assessment that overall growth remains below the level the economy can potentially achieve. The higher forecasts therefore came alongside an unchanged interest rate, which the committee described as appropriate to support the recovery. The improved estimates do not change the fact that the growth gap identified by the bank persists.
Against the backdrop to the decision, the bank’s governor said in October that there was no urgency to raise interest rates and that monetary policy could not address the structural constraints limiting growth, Reuters reported via Investing.com. The statement sets limits on what the bank’s tools can achieve in tackling factors that constrain economic activity. The governor also forecast that exports would grow between 17% and 18% in 2026, compared with previous growth of 14%. But he said rising imports were limiting the overall impact of exports on growth. The picture presented by the governor thus combines expectations of stronger exports with a smaller overall contribution due to imports. The statement did not present monetary policy as a remedy for structural constraints.
On prices, headline inflation averaged 1.54% year on year during the first nine months of 2026, Reuters reported via Investing.com. The bank placed this average within its official target range of 1% to 3%. In its assessment of the October meeting, it said the rise in inflation was temporary and resulted from supply-side factors. This provides context for the committee’s confirmation that the current interest rate was appropriate to support the recovery, without establishing that the hold decision was based specifically on rising inflation risks. The bank’s description of growth as below its potential level remains a central part of its balance between supporting activity and monitoring prices. The available facts here do not include the publication of meeting minutes or the date of the next meeting.