Rates cut as growth gets slashed

Central bank acts as economy is buffeted

- SOMRUEDI BANCHONGDUANG NAREERAT WIRIYAPONG

The Bank of Thailand has slashed its 2025 GDP growth forecast to a range of 1.3% to 2.0%, while voting to cut its policy rate by 0.25 percentage points to 1.75%.

In February, the central bank forecast the Thai economy would grow by less than 2.5% this year.

According to Monetary Policy Committee (MPC) secretary Sakkapop Panyanukul, the Thai economy is expected to grow at a slower pace amid rising downside risks from global trade policies and weakening tourism trends.

The trade policy impacts are expected to become more pronounced in the second half of 2025, while significant uncertainty persists, he said.

In response to the heightened risks and uncertainties, the MPC evaluated the economic outlook under multiple scenarios. In the baseline scenario, trade negotiations remain prolonged and US tariffs stay near current levels, with GDP growth of 2.0% this year.

A more adverse scenario involving escalating trade tensions and significantly higher US tariffs could slow growth to around 1.3%, said the MPC.

"The actual outcome will depend on the policies and adjustments made by various countries," Mr Sakkapop said.

"It's crucial to monitor global trade developments and their potential impacts on the Thai economy."