BANGKOK, June 24 — Thailand's central bank upgraded its economic growth forecasts today, signalling a modest improvement in the outlook after it held interest rates steady for a second meeting.
The Bank of Thailand (BOT) said it expected economic growth to come in at 2.3 per cent this year, up from an earlier projection of 2.0 per cent made this month, following the government's announcement of plans to borrow an additional ฿400 billion (RM49.52 billion). It forecast 1.5 per cent growth at its April policy review.
"Thailand's economic expansion is projected to be stronger than previously assessed, but growth remains low and uneven," it said in a statement.
The central bank forecast 2027 growth at 1.8 per cent, versus 1.7 per cent projected in early June. The economy grew 2.4 per cent last year, lagging peers.
The BOT's monetary policy committee voted unanimously to maintain the one-day repurchase rate at 1.00 per cent.
Six cuts between October 2024 and February reduced the key rate by 150 basis points as policymakers sought to spur momentum in Southeast Asia's second-largest economy, which has been grappling with sluggish domestic demand and high household debt.
The surge in global energy prices meant inflation would remain high this year and ease next year as supply-side pressures eased.
"We expect interest rates to remain unchanged for the rest of this year, with the BOT likely to resume its easing cycle next year if inflation falls back as we anticipate," said Capital Economics' senior Asia economist Gareth Leather.
Inflation is expected to rise above the target range later this year. Headline inflation is projected at 3.3 per cent in June and to peak at 4.5 per cent from October to December.
Despite rising price pressures, overall credit growth remains subdued.
The central bank said it expected exports to rise 14 per cent this year, versus a forecast of 12 per cent to 13 per cent growth made in early June.
The BOT added that foreign tourist arrivals are forecast at 33 million this year, unchanged from the previous forecast.
Last month, the state planning agency maintained its 2026 economic growth forecast at 1.5 per cent to 2.5 per cent despite stronger-than-expected growth in the first quarter.
The central bank's next interest rate meeting is on August 26.
The BOT said the baht's weakness was mainly due to a stronger United States dollar and, more recently, to capital outflows from the stock market.
"Despite improving developments surrounding the Middle East conflict, cost pass-through by firms warrants close monitoring amid elevated costs, as well as medium-term inflation expectations," it said.
All 28 economists in a Reuters poll had expected the central bank to hold policy steady. Of those surveyed, 23 of 27 predicted the rate would remain unchanged throughout 2026, while three forecast at least one 25-basis-point hike by the year-end, and one expected a rate cut.
