MPC secretary Sakkapop Panyanukul, who announced the decision, said the committee voted five to two in favour of the rate cut, while two members opted to maintain the policy rate at 2.5%.

“The overall Thai economy is projected to expand as anticipated, and headline inflation is expected to gradually return to the target range by the end of 2024,” he said in a statement released today.

Sakkapop noted that the deleveraging process is expected to continue, and the committee believes a neutral stance on the policy rate remains appropriate given the economic growth and inflation outlook.

“Most members supported the decision to cut the policy rate by 0.25 percentage points to ease the debt-servicing burden for borrowers.

“Additionally, the lower policy rate is not expected to hinder the deleveraging process, given the anticipated slowdown in loan growth. It remains neutral and consistent with the country’s economic potential,” he explained.

Sakkapop further noted that the Thai economy is projected to grow at rates close to previous estimates, at 2.7% in 2024 and 2.9% in 2025.

The main drivers of this growth, he said, are tourism, private consumption — boosted by government stimulus measures — and improvements in exports due to increased demand for electronics.

“However, the recovery has been uneven across sectors. Some segments of merchandise exports, manufacturing, and small and medium-sized enterprises continue to face challenges due to structural impediments,” he added.

He reiterated that the central bank’s monetary policy framework aims to maintain price stability, support sustainable growth, and preserve financial stability.

“The committee agrees that the policy rate should remain neutral and aligned with the economy’s potential.

“At the same time, it should not be set too low, which could lead to the build-up of financial imbalances in the long term,” Sakkapop concluded.