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27 Nov 2023

Financial Institutions

MPC Meeting, November 29, 2023: Policy rate will likely be maintained at 2.50% and this rate may be kept steady throughout 2024 (Business Brief No.4025)


        It is expected that the Monetary Policy Committee (MPC) will maintain its policy rate at 2.50 percent during the upcoming meeting on November 29, 2023 as inflationary pressures have eased substantially while the Thai economy is recovering, albeit at a fragile pace as reflected in the lower-than-expected 3Q23 GDP growth.   
        Looking ahead, we at KResearch view that the MPC will likely keep its policy rate steady at 2.50 percent throughout 2024 if the Thai economy continues to recover and grow at not less than that seen in 2023. We also expect that the steady recovery in the Thai economy will be supported chiefly by tourism. Exports will return to positive territory in 2024 due to the low base of 2023. Economic stimulus measures slated for implementation in 2024 will be an important factor helping bolster domestic consumption.
        Meanwhile, inflation is expected to remain within the MPC’s target range of 1-3 percent in 2024. Although the current inflation rate in Thailand has declined significantly, there remains uncertainty surrounding global commodity prices that may escalate again, posing challenges for the government to implement measures, aimed at reducing the cost of living, particularly energy bills. The MPC has earlier signaled that it would keep its policy rate at high levels to maintain the policy space for future downside risks, especially if the Fed keeps its rate high for longer amid a stronger-than-expected US economy.

Financial Institutions