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12 Dec 2024

Econ Digest

MPC Meeting, December 18, 2024: MPC is expected to maintain its policy rate at 2.25%, but may cut the rate twice next year

คะแนนเฉลี่ย

        At the upcoming Monetary Policy Committee (MPC) meeting slated for December 18, 2024, the MPC is expected to keep its policy rate steady at 2.25% in a split vote. At its previous meeting in October, the MPC decided to cut the policy rate by 0.25%, viewing the action as bringing the rate to a neutral level consistent with economic risk, inflation, and financial stability. Given the current risk factors and the anticipated economic uptick in 4Q-2024, driven by the tourism season and government stimulus measures, the MPC is likely to maintain the policy rate at the December 18 meeting.

        In 2025, the MPC may reduce the policy rate two more times due to heightened risks to the Thai economy. Particularly, those stemming from potential US tariff hikes on imports from various countries, including Thailand, and intense competition from Chinese products flooding the Thai market, which could impact local businesses. Meanwhile, inflation in 2025 is expected to stay below the BOT’s target range of 1-3%. However, the future direction of the MPC’s monetary policy, particularly the timing and magnitude of any interest rate cuts, remains highly uncertain. It will largely depend on incoming economic data, inflation, and financial stability.

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