Thai monetary policy 'very, very accommodative', no change to growth outlook, central bank official says

Bangkok, 17th September: The Bank of Thailand's monetary policy remains very accommodating to bolster a sluggish economy, according to an assistant governor. In an interview with Reuters, Don Nakornthab stated the current interest rate of 1.00 per cent is among the lowest globally and necessary for the economy's recovery. The central bank maintained its key interest rate at 1.00 per cent for the third consecutive month, citing low economic growth and uneven recovery.

The next policy review is scheduled for October 28. Don emphasized that while a pause in rate adjustments might be expected by the private sector, all options remain open. He added that the current accommodative stance is appropriate for now, but rate changes can occur either way. The central bank has cut policy rates six times by 150 basis points between October 2024 and February 2026 to stimulate the economy, which is suffering from weak domestic demand and high household debt levels.

Thailand's economy contracted by 1.9 per cent annually in the second quarter of 2026, down from 2.8 per cent growth in the previous quarter. Don mentioned the central bank is sticking to its June projections for GDP growth of 2.3 per cent this year and 1.8 per cent next year. Headline inflation is expected to be around 2 per cent this year, down from June's forecast of 2.8 per cent.

Exports for this year could exceed the 14 per cent growth forecast in June, while the baht's weakness is beneficial for exports and the economy, as long as it remains orderly.