According to a Reuters report on Friday, Bank of Thailand Deputy Governor Piti Disyatat expressed his view on Thailand’s monetary policy, suggesting the central bank’s readiness for further rate easing to cushion the economy against escalating global trade tensions.
With Thailand’s first-quarter GDP figure being due for release on May 19, the Bank of Thailand (BOT) expects the figure to expand by about 2.5% year-on-year, a slowdown compared to the 3.2% growth recorded in the final quarter of 2024.
Earlier this week, the central bank lowered its policy rate by 25 basis points for the second consecutive meeting, bringing borrowing costs to a two-year low of 1.75%. The move was accompanied by a downgrade in the 2025 growth outlook to 2%, based on the assumption that U.S. tariffs remain near 10%.
The deputy governor noted that, while the current policy stance is somewhat accommodative, future actions would depend on evolving economic conditions and emerging risks.
Thailand, one of Southeast Asia’s more exposed economies to U.S.-China trade frictions, could face a steep 36% tariff if ongoing negotiations do not achieve a reduction before the expiration of the U.S. tariff moratorium in July. The impact of these tariffs is expected to become more apparent in the latter half of the year, with growth in the second quarter seen as relatively stable.
Piti stated that, should the trade war intensify and tariffs rise to half of the proposed levels, the country’s economic growth could slow to just 1.3% this year.
Additionally, he views the current level of the baht as generally aligned with economic fundamentals, while pledging to monitor exchange rate stability to avoid excessive market volatility.
