The Monetary Policy Committee (MPC) unanimously voted to hold the policy rate at 1% per annum, stating that accommodative monetary policy along with targeted measures will support economic recovery, but it must monitor the situation in the Middle East, trade protectionist measures, and inflation risks. The MPC assessed that the Thai economy is likely to expand close to expectations, supported by the technology and AI cycle that has improved exports and private investment. However, private consumption will slow due to higher cost of living. Although government measures will temporarily boost consumption in the third quarter, it will slow in the fourth quarter and is expected to recover in 2027 as the cost of living declines. The MPC is also concerned about consumption being pressured by high living costs and household debt. Meanwhile, inflation is likely to rise temporarily due to energy prices and El Niño, but will return to low levels in the medium term.
Bank of Thailand holds rate at 1%, signaling steady policy and uneven recovery, likely keeping yields low.
