BoT pegs growth at sub-2% for 18 months
Speaking at a monetary policy forum on Wednesday, Piti Disyatat, deputy governor for monetary stability at the central bank, said the heightened uncertainties arising from US tariffs on Thai exports are expected to negatively impact the country's exports, private investment, and domestic consumption in the second half of 2025 and throughout 2026.
The central bank will continue to monitor the impacts of US tariffs to better anticipate the country's economic trajectory, but the policy represents a significant external shock to both the global and Thai economies, and its adverse effects are expected to persist into next year, said Mr Piti.
Given the increased uncertainty, the Thai economy is projected to slow in the second half of 2025.
For the third and fourth quarters of this year, average GDP growth is projected at 1.6% year-on-year and 0.1% quarter-on-quarter, he said.
The central bank forecasts economic growth of 2.3% for 2025, with a 2.9% expansion in the first half and a 1.6% increase in the second half. For 2026, the regulator slashed its growth forecast to 1.7%.
"On average, Thailand's quarterly GDP growth in 2026 is projected to be 0.6%, which is below the potential growth rate of 0.7-0.8% per quarter," said Mr Piti.
Due to the uncertainty surrounding US tariffs, Thai exports are expected to grow by 4% in 2025, but contract by 2% in 2026.
Private investment is projected to grow 1.7% this year before slowing to 0.9% next year, while domestic consumption is expected to expand 2% in 2025 and slow to 1.7% in 2026, according to the central bank.
The regulator estimates exports will contract by 4% in the second half of this year, primarily due to the impact of US tariffs, following a strong 12.6% expansion in the first half driven by front-loaded shipments.
Mr Piti said the central bank and its Monetary Policy Committee expect the effects of the external shock to linger into next year.
As a result, the bank's monetary policy will be aligned with the direction of the Thai economy in the second half of this year and throughout next year, he said.
"Maintaining policy space is essential to support economic resilience amid long-term uncertainties," said Mr Piti.
"A policy rate cut would do little to stimulate economic activity given the subdued loan demand."
Sakkapop Panyanukul, assistant governor for monetary policy at the central bank, said domestic political uncertainty is one factor to monitor as the Thai economy faces political risks, especially delays in the approval of the fiscal budget.
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