Bank of Thailand raises policy rate to 2.5%, highest since 2013

The Monetary Policy Committee (MPC) of the Bank of Thailand unanimously approved a quarter-percentage point increase in the policy rate, raising it from 2.25% to 2.50%. This change, which took effect yesterday, marks the highest rate since October 2013.

According to Piti Disyatat, the MPC secretary, the Thai economy is on a slow recovery path this year, primarily due to weak external demand. He expresses confidence that if the current pace is maintained, the policy rate will likely remain steady for some time.

However, the MPC has revised its growth forecast for 2023 from 3.6% to 2.8%, due to ongoing slack demand. The delayed recovery in merchandise exports and tourism has also contributed to a slight dip in growth this year. Other factors include a subdued economy in China and stagnation in the global economy.

Estimates for foreign arrivals this year…