Analysts project 2 more interest rate cuts

Risks are starting to amass

- NAREERAT WIRIYAPONG

Analysts increasingly expect the Bank of Thailand to make two more interest rate cuts by the first quarter of 2026 to reduce the policy rate to 1%, aiming to revitalise the economy as economic and political risks accumulate.

Accelerated public spending and resilient exports helped to prop up second-quarter GDP, which expanded above the consensus forecast to 2.8% year-on-year, while first-half GDP growth was 3%, said KGI Securities (Thailand).

However, economic momentum should fade significantly in the second half, said Rakpong Chaisuparakul, senior vice-president of the brokerage.

“Based on actual readings for the first six months and our 2025 GDP projection of 1.9%, we calculate GDP growth could slow significantly to 0.9% year-on-year in the second half given a higher base effect from government spending and a more visible effect from the US reciprocal tariff as the front-loaded effect dissipates,” he said.