Thai economic growth seen uneven and below potential: central bank minutes

[BANGKOK] Thailand’s economy is projected to grow below its potential and unevenly across sectors, the minutes of the Bank of Thailand’s Feb 25 policy meeting showed on Wednesday.

At the meeting, the monetary policy committee unexpectedly cut the one-day repurchase rate by 25 basis points to 1 per cent, to support growth.

Manufacturing and tourism competitiveness were declining, the minutes said.

The committee was concerned by the baht’s misalignment with economic fundamentals and said a policy rate of 1 per cent was sufficiently accommodative and consistent with the outlook.

Growth is expected to be about 2 per cent this year, although Governor Vitai Ratanakorn has said he is aiming for as high as 2.7 per cent.

On March 4, Vitai said growth could drop by 0.1 to 0.2 percentage points in 2026 due to conflict in the Middle East, and said policy adjustments and additional financial measures could be rolled out as needed.

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South-east Asia’s second-largest economy, which has lagged regional peers since the pandemic, expanded 2.4 per cent last year. REUTERS