Bank of Thailand deputy governor expects GDP rebound in Q4
If Piti Disyatat’s Q4 prediction is true, South-east Asia’s second-largest economy will avoid a technical recession
[BANGKOK] Bank of Thailand (BOT) deputy governor Piti Disyatat on Tuesday (Jan 6) said that the nation’s economic growth is expected to turn positive in the fourth quarter of 2025, though he added that policymakers need to be judicious about making further rate cuts.
“We expect the fourth-quarter (gross domestic product) to be positive quarter on quarter… it (better) tells you its near-term momentum,” Piti told the Reuters Global Markets Forum, adding that he expects Thailand to meet its annual growth forecast of 2.2 per cent for 2025.
If Piti’s Q4 prediction comes to fruition, South-east Asia’s second-largest economy would avoid a technical recession, after the economy shrank by 0.6 per cent in Q3, its first contraction in 11 quarters.
The BOT expects growth momentum to moderate to 1.5 per cent this year, before picking up to 2.3 per cent in 2027.
Piti also said that he expects headline inflation to rebound into positive territory by March or April 2026.
Thailand’s December annual inflation print, due on Wednesday, is expected at minus 0.34 per cent, a Reuters poll indicated.
Annual headline inflation was negative for the eighth month in a row in November 2025, as the central bank forecast a minus 0.1 per cent print for 2025, before a pickup to 0.3 per cent in 2026.
In December, the BOT lowered rates for the fifth time since October 2024 to 1.25 per cent, for a total reduction of 125 basis points. Market participants expect at least one more reduction in February, indicated London Stock Exchange data.
“Very judicious”
Piti said that the BOT would robustly use its “remaining ammunition” to address shocks to the economy that could come from tightening global financial conditions, a deterioration in global markets or a further slowdown in domestic demand.
“We are already running low on the policy space (and) have to be very judicious in using that room when the impact is most needed,” he added.
The baht emerged as Asia’s second-best-performing currency, with an 8 per cent surge in 2025.
A volatile baht has added to the headwinds, which have come from US tariffs, Thailand’s high household debt, a border conflict with Cambodia and political uncertainty ahead of a February election.
That volatility prompted the central bank to intervene heavily in the currency market in the second half of 2025, but Piti said that the BOT has not targeted specific baht levels.
“Our main focus is to make sure (baht) volatility is not excessive, and doesn’t get too driven by non-fundamental factors,” he noted.
In addition, the Thai Ministry of Finance is considering a tax on online gold transactions, along with measures to limit trading volumes by the biggest players to contain the currency’s rapid moves.
Traders have opposed these measures, which they believe will reduce Thailand’s appeal as a gold trading hub.
“It’s not like we’re trying to kill off all gold trade. We just try to reduce the amount of gold trading that is excessive in baht,” Piti said, adding that the central bank would instead encourage US dollar-denominated gold trading to reduce the impact on the local currency.
The BOT expects gold transactions by large traders to equal 50 per cent of the country’s 2025 GDP.
Gold rallied 64 per cent in 2025, its biggest annual rise in 46 years, boosted by geopolitical tensions and US rate-cut expectations.
Markets now expect the precious metal to hit US$5,000 per ounce in 2026, implying an upside of nearly 16 per cent from its Dec 31 close. REUTERS
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