Shares of Thailand’s key finance firms, including JMT Network Services rose 2.19% to THB9.35, Muangthai Capital gained 2.52% to THB40.75, and Srisawad Corporation increased 3.19% to THB19.40, rose as the session on Friday is drawing to a close.
The rally followed growing speculation that the Bank of Thailand may lower its policy rate from the current 1.75% to as low as 1.50% or below.
This expectation comes after inflation data for May revealed persistent weakness, remaining well under the central bank’s 1–3% target range. The Ministry of Commerce reported Friday that Thailand’s headline consumer price index (CPI) registered a 0.57% decrease year-on-year in May—extending the previous month’s decline of 0.22%. The figure beat consensus forecasts, as surveyed by Reuters, which called for a sharper 0.80% drop. Despite being marginally better than estimates, headline inflation has now firmly undershot policy targets for several consecutive months.
Core inflation, which excludes typically volatile categories such as food and energy, showed an annual increase of 1.09% in May, exceeding analyst expectations of a 0.94% rise.
In light of recent trends, the Ministry of Commerce has revised its 2025 inflation outlook, now anticipating headline inflation between 0% and 1% for the year, down from its prior estimate of 0.3% to 1.3%. For June, headline inflation is forecast to stay muted between 0.2% and 0.4%. Over the first five months of 2025, CPI growth averaged just 0.48%, while core inflation settled at 0.95%.
Looking ahead, officials expect annual inflation to remain negative or flat in the second quarter (ranging between -0.1% and 0%), before a slight uptick to a band of 0.1% to 0.3% during the third quarter. By the end of the year, the pace of price increases is expected to gather modest momentum, with inflation projected at 0.7% to 0.9% in the fourth quarter.
Against this backdrop, a Reuters poll suggests that the Bank of Thailand could deliver another 25 basis point rate cut in the third quarter of 2025, bringing the benchmark down to 1.50%, where it is expected to remain through the end of the year. Economists anticipate the next move lower, of an additional quarter-point, to come in the first quarter of 2026.
