Bank of Thailand to cut Interest Rates by 25bps, to Roll Out Stimulus

Thailand's economy is projected to grow by 3% this year, with higher growth expected in 2025, driven by the government's upcoming stimulus measures, according to Julapun Amornvivat, the Deputy Finance Minister. He noted that despite the central bank's latest forecast of 2.7% growth for 2024, the government is optimistic about achieving 3% growth, with the economy poised to expand by more than that in 2025. The comments follow the Bank of Thailand's recent decision to cut its key interest rate by 25 basis points to 2.25%, marking the first rate reduction since 2020.

This move aligns with government efforts to lower borrowing costs and support growth, especially after the economy grew just 2.3% year-on-year in Q2, following modest growth of 1.9% in 2023.

Julapun outlined plans for additional economic measures, set to be discussed next month, which will include tax breaks for flood-hit tourism areas and initiatives to boost consumption. The government will also move forward with the second phase of its digital wallet stimulus program, a $14 billion scheme aimed at distributing 10,000 baht (approximately $302) to 45 million people.

Foreign investment and accelerated government spending will further support Thailand's economic growth in the coming years.