Mr. Vitai Ratanakorn, Governor of the Bank of Thailand (BOT), stated at the “Thailand Blooming 2026: Awakening Thailand’s Future” seminar, organized by the Matichon Group, that Thai commercial banks currently maintain strong financial positions and high profitability, contrasting to the vulnerability still experienced by the economy, businesses, and the public.
He believes it is time for financial institutions to play a greater role in supporting the economy. The BOT is preparing to discuss with financial institutions to increase lending, especially to the SME sector, as well as to lower some interest rates. This effort aims to allocate financial resources more efficiently and align with real economic conditions.
Since assuming his position, the BOT has implemented targeted measures to address structural problems, such as resolving household debt issues by transferring bad retail debts to Sukhumvit Asset Management Company (SAM), preparing to launch an SME loan guarantee program to tackle continuous negative SME lending, and tightening oversight of gold transactions to ease pressure on the baht.
Mr. Vitai stated that stimulating the economy through money supply expansion will only be effective if it results from actual credit growth, not quantitative easing (QE), since commercial bank lending generates money within the system and creates economic circulation.
The overall Thai economic outlook this year is not encouraging, with GDP growth expected at only 1.5–1.6%, the lowest in a decade apart from the COVID-19 pandemic, as Thailand faces numerous domestic and external risks. Several structural problems continue to weigh down the Thai economy. These issues cannot be resolved in the short term, though they can be gradually alleviated with sincere cooperation from all parties.
If exports perform better than expected in the latter half of the year, GDP growth may reach 1.6–1.7%. However, Mr. Vitai warns that failure to urgently address structural problems will harm long-term economic stability. Monetary policy alone, especially lowering the policy rate, cannot solve competitiveness, grey capital, or corruption issues, necessitating a role and tool adjustment for the BOT to match the changing context.
“If the Thai economy could grow to its full potential, GDP should reach 2.7% this year. Therefore, short-term economic stimulus remains necessary to support at least 2.2% growth, while striving to approach potential levels requires investment from both the public and private sectors,” Mr. Vitai stated.
Mr. Vitai added that the BOT also prioritizes combating grey money and corruption by requesting cooperation from commercial banks to report suspicious cash withdrawals, despite the absence of supporting legislation.
The BOT is also preparing to issue rules mandating explanations for large cash withdrawals regarding source and purpose, after recent findings of cash withdrawals in the hundreds of millions of baht, which have been forwarded to the relevant authorities for investigation.
