At its meeting on February 26, 2025, the Monetary Policy Committee (MPC) will likely maintain its policy rate at 2.25% while adopting a wait-and-see approach regarding the Thai economy amidst high uncertainties, particularly from the US import tariff policy. Meanwhile, the domestic economy in the first half of this year is expected to expand nearly on par with the 3.2% YoY growth reported for 4Q-2024, supported by economic stimulus measures, accelerated exports, and government budget disbursements.
KResearch expects the MPC to cut its policy rate 1-2 times later in 2025, with the weight given primarily to domestic economic risks and financial stability. The delayed trend of global monetary policy easing, influenced by the Fed, may not be the main factor considered by the MPC.
The Thai economy may face heightened risks from internal and external factors, especially in the second half of 2025. This year, Thai exports may slow due to the impact of renewed trade wars. Meanwhile, the domestic economy may face pressures from the manufacturing sector, which has yet to recover, and a slowing momentum in household spending amidst economic uncertainties and high household debt. Additionally, the government’s economic stimulus measures are expected to provide only limited, short-term support for household spending.
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