Bank of Thailand projects inflation within target range
The Bank of Thailand (BOT) expects inflation to stay within its 1 to 3 per cent target range for the next two years, with Governor Sethaput Suthiwartnarueput describing the band as vital for supporting the nation’s growth.
The target, unchanged for the fifth consecutive year, has successfully anchored medium-term inflation expectations and offers flexibility to manage external shocks.
Inflation in Thailand remained below the target for the sixth straight month in November, at 0.95 per cent. Despite this, the BOT left its key interest rate unchanged at 2.25 per cent on December 18, following an unexpected rate cut in October. The Monetary Policy Committee (MPC) anticipates that inflation will generally stay within the target range, though temporary deviations may occur due to economic shocks.
In a statement following the Cabinet’s approval of the 2025 monetary policy target, Sethaput noted that the BOT and Ministry of Finance will hold regular discussions to align fiscal and monetary policies.
While there are no commitments to push inflation to a midpoint target of 2 per cent, as suggested by Finance Minister Pichai Chunhavajira, the MPC would issue an open letter to the finance minister if inflation falls outside the target, outlining corrective actions.
Attribution: Bloomberg
Subediting: M. S. Salama