Thailand Holds Interest Rate Steady Amid Economic Growth and Global Uncertainty

The Bank of Thailand (BOT) is expected to keep its key interest rate at 2.25% on February 26, with a potential rate cut later this year, as per a Reuters poll of economists. With the economy growing at 3.2% in Q4—its fastest pace in over two years—and inflation under control, there is little urgency for immediate monetary easing.

Over 60% of economists in the February 14-21 poll predict no rate change, while 10 out of 26 expect a 25-basis-point cut. The central bank aims to assess the impact of existing government policies, such as the cash handout scheme launched in September, before making further adjustments.

Despite growth falling short of the government's 3.5% target, Thailand’s finance ministry has urged the BOT to cut rates further to stimulate the economy. Among economists providing long-term forecasts, 17 of 23 expect a 25-bp cut by mid-year, bringing the rate to 2.00%. However, four predict no change, while two see a potential drop to 1.75%.

The BOT remains cautious due to global economic uncertainties. Weakening demand from China and potential U.S. trade protectionist measures pose risks to Thailand’s trade and tourism sectors—key economic pillars. Some analysts suggest additional rate cuts could be possible if downside risks materialize.

The median forecast indicates rates will stay at 2.00% until at least mid-2026, reflecting a balanced approach between economic growth and financial stability. While policymakers weigh further action, Thailand's economic outlook will largely depend on global trade conditions and domestic policy effectiveness.