Impact of higher interest rates on Thai businesses and homebuyers

Concerns are rising among industry leaders that higher interest rates could negatively impact businesses, particularly small ones, and weaken the purchasing power of homebuyers. The Bank of Thailand’s Monetary Policy Committee recently voted to raise the policy rate to 2.00% from 1.75%, prompting state and private banks to follow suit.

The Federation of Thai Industries (FTI) warns that higher interest rates will pressure manufacturers to increase goods prices, causing distress for struggling small and medium-sized enterprises (SMEs). Kriengkrai Thiennukul, chairman of the FTI, says that increased interest rates lead to greater financial costs, making it difficult for some companies to maintain product prices or even continue operations.

The property market is also likely to be affected, with the Real Estate Information Center (REIC) suggesting that an interest…