Thai PM: Central bank should cut rates by at least 25 bps

Thai Prime Minister Srettha Thavisin told Reuters the central bank should cut its key interest rate by at least 25 basis points this week, as the government forges ahead with a stimulus scheme worth US$13.6 billion to spark economic activity.

The flagship “digital wallet” programme will be rolled out in the final quarter of the year but will not be financed by a loan Bill, Srettha said in an interview on Sunday (Apr 7).

He said the funding sources will be finalised at a meeting on Wednesday (Apr 10), the same day as the central bank’s monetary policy meeting.

“(The economy) will be stimulated, and hopefully by the first quarter of next year, we will see some results,” he said.

The central bank has so far resisted government pressure to ease policy. It held the key interest rate steady at 2.50 per cent in February, the highest level in more than a decade, in a split vote. Some economists expect a rate cut on Wednesday.

Srettha said annual growth in South-east Asia’s second-largest economy may have slowed to below 1 per cent in the first quarter of 2024 from annual growth of 1.7 per cent in the previous three months.

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He also said the government plans to boost tourism by hosting multiple large-scale events and creating tax incentives to draw in more tourist numbers and dollars.

“Next year will be the biggest ever year for Thai tourism,” he said.

Srettha said the government is exploring the use of nuclear power for electricity generation in the long term as part of a plan to diversify to clean energy sources and draw in investment. REUTERS