Thailand’s Finance Minister and Prime Minister, Srettha Thavisin, expressed his belief that a cut in key interest rates would have greatly benefited the country’s economy. This statement was made after the Bank of Thailand decided to keep interest rates steady. Srettha has been advocating for rate cuts in an effort to stimulate an economy he believes is in crisis and falling behind regional peers.
Despite his disagreements with the central bank, Srettha emphasized that he does not want to pressure them and respects their independence. The central bank’s monetary policy committee recently voted 5-2 to maintain the 2.50% interest rate, marking the second consecutive meeting without a rate cut. The next rate review is scheduled for June 12.
Srettha argued that most academics support a rate cut, as it would benefit key sectors such as exports and tourism, ultimately helping the overall economy. As a political newcomer who also serves as the finance minister, he has been actively advocating for rate cuts to address high household debt and challenges posed by China’s economic slowdown.
Thailand’s economy faced unexpected challenges, with a 0.6% contraction in the final quarter of 2023. As a result, the state planning agency revised down its 2024 growth outlook. While the central bank defended its decision to maintain the current interest rate, the government remains optimistic, projecting a 4% growth rate for the current year.
Overall, there is ongoing debate between government officials and the central bank regarding the appropriate monetary policy measures needed to support Thailand’s economic recovery and growth.
