Thailand’s Finance Minister and Prime Minister Srettha Thavisin expressed disappointment at the Bank of Thailand’s decision to keep interest rates steady. He believes that the economy would have benefited from a rate cut, as he has been urging the central bank to lower the rates since last year. Despite months of pressure from the government, the central bank’s monetary policy committee voted 5-2 to maintain the interest rates at 2.50%.
Srettha has openly disagreed with the central bank, arguing that rate cuts would help address issues such as high household debt and China’s economic slowdown. However, despite these challenges, the central bank believes that the current interest rate is appropriate for Thailand’s economic outlook and will not impede growth.
Thailand’s economy unexpectedly contracted by 0.6% in the final quarter of 2023, leading the state planning agency to revise its 2024 growth outlook to between 2.2% and 3.2%. This was lower than the earlier projection of 2.7% to 3.7%. The next rate review is scheduled for June 12th, as uncertainty looms over the direction of Thailand’s monetary policy.
