Thailand Expected to Cut Interest Rates to 1.25% Amid Slowing Growth

The Bank of Thailand (BOT) is expected to cut its key policy rate by 25 basis points this week to support a sluggish economy and counter the impact of a strong baht on exports and tourism, according to a Reuters poll.

Over 70% of economists surveyed anticipate a reduction to 1.25%, while the rest expect no change or a deeper cut. The move follows months of negative inflation and a dovish stance from new Governor Vitai Ratanakorn, who has signaled the need for accommodative policy.

Thailand’s economic momentum has weakened amid slower U.S. exports, weak industrial output, and subdued tourist arrivals. The baht’s recent 8% surge has further hurt competitiveness.

While some analysts urge caution, others say a rate cut could help shore up confidence and stimulate domestic demand until fiscal stimulus measures kick in. Most forecasts point to the BOT maintaining lower rates through 2025, as growth remains tepid at around 2%.