Latest news with #Sakkapop
Reuters
2 days ago
- Business
- Reuters
Thailand cuts key rate to near three-year low as growth sputters, more easing expected
BANGKOK, Aug 13 (Reuters) - Thailand's central bank lowered its policy rate to a near three-year low on Wednesday to boost a slowing economy grappling with U.S. tariffs, falling prices and weak foreign tourist arrivals, with further policy easing seen later this year. As widely expected, the monetary committee unanimously cut the one-day repurchase rate (THCBIR=ECI), opens new tab by 25 basis points to 1.50%, the lowest since late 2022. It was the fourth reduction in 10 months. The economy was expected to expand this year and next, close to earlier assessments of 2.3% and 1.7%, respectively, but U.S. trade policies would exacerbate structural problems and weaken competitiveness, with small businesses especially vulnerable, the Bank of Thailand said. "The committee views that monetary policy should be accommodative going forward to support the economy," it said. This year's growth forecast has some upside from a surge in exports, assistant governor Sakkapop Panyanukul told a press conference after Wednesday's decision. Exports, a key growth driver, grew 15% annually in first six months of 2025 as shippers raced to beat U.S. tariffs, but higher U.S. levies on most trading partners went into effect on August 7, with those on Thai imports set at 19%. The economy will slow in the second half, although there is little chance of a technical recession - or two consecutive quarterly contractions, Sakkapop added. The central bank is ready to ease further if the economy faces severe shocks, he said. "Weak economic growth remains the main reason for expecting more easing," said Gareth Leather, senior Asia economist at Capital Economics, said in a note, predicting a further 50 basis-point cuts by the end of the year. Southeast Asia's second-largest economy also has struggled with weak consumption and high household debt, with analysts expecting rate reductions at reviews in October and December. Wednesday's meeting was the last for Governor Sethaput Suthiwartnarueput. New Governor Vitai Ratanakorn, widely seen as dovish, will take over in October, and he has said rate cuts will support growth. "Led by the new BoT Governor, we expect the BoT to deepen its easing cycle further, cutting the policy rate to 1.00% by 1Q 2026," HSBC economist Aris Dacanay said in a note. Kobsidthi Silpachai, head of Capital Markets Research at Kasikornbank, expects a further cut in December. Sakkapop also said that the central bank will ensure that the baht currency moves in line with economic fundamentals. The baht reversed course to fall 0.1% after the announcement, while Thai stocks (.SETI), opens new tab extended gains after the decision. Finance Minister Pichai Chunhavajira said the rate cut will boost liquidity and help exporters by weakening the baht, which has firmed more than 6% against a softening U.S. dollar so far this year. In June, the BOT predicted 2025 economic growth of 2.3%, with export growth of 4%, after factoring in U.S. tariff rates of 18%. The economy expanded 2.5% last year, lagging peers. There are still uncertainties relating to U.S. tariffs on transshipments via Thailand from third countries. The United States was Thailand's biggest export market last year, accounting for 18.3% of total shipments, with a value of $55 billion. Consumer prices (THCPI=ECI), opens new tab in July fell 0.7% from a year earlier, down for a fourth consecutive month, and below the central bank's target range of 1% to 3% for the fifth consecutive month. Headline inflation was subdued because of supply-side factors but there are no signs of deflation yet, Sakkapop said. In June, the central bank predicted headline inflation of 0.5% this year, with the core rate seen at 1%. Adding to the challenges is renewed political turmoil that could bring down, opens new tab Prime Minister Paetongtarn Shinawatra, opens new tab or the coalition government led by her Pheu Thai party.
Gulf Today
3 days ago
- Business
- Gulf Today
Thailand cuts key rate to near 3-year low as growth sputters
Thailand's central bank lowered its policy rate to a near three-year low on Wednesday to boost a slowing economy grappling with US tariffs, falling prices and weak foreign tourist arrivals, with further policy easing seen later this year. As widely expected, the monetary committee unanimously cut the one-day repurchase rate by 25 basis points to 1.50%, the lowest since late 2022. It was the fourth reduction in 10 months. The economy was expected to expand this year and next, close to earlier assessments of 2.3% and 1.7%, respectively, but US trade policies would exacerbate structural problems and weaken competitiveness, with small businesses especially vulnerable, the Bank of Thailand said. 'The committee views that monetary policy should be accommodative going forward to support the economy,' it said. This year's growth forecast has some upside from a surge in exports, assistant governor Sakkapop Panyanukul told a press conference after Wednesday's decision. Exports, a key growth driver, grew 15% annually in first six months of 2025 as shippers raced to beat US tariffs, but higher US levies on most trading partners went into effect on August 7, with those on Thai imports set at 19%. The economy will slow in the second half, although there is little chance of a technical recession - or two consecutive quarterly contractions, Sakkapop added. The central bank is ready to ease further if the economy faces severe shocks, he said. 'Weak economic growth remains the main reason for expecting more easing,' said Gareth Leather, senior Asia economist at Capital Economics, said in a note, predicting a further 50 basis-point cuts by the end of the year. Southeast Asia's second-largest economy also has struggled with weak consumption and high household debt, with analysts expecting rate reductions at reviews in October and December. Wednesday's meeting was the last for Governor Sethaput Suthiwartnarueput. New Governor Vitai Ratanakorn, widely seen as dovish, will take over in October, and he has said rate cuts will support growth. 'Led by the new BoT Governor, we expect the BoT to deepen its easing cycle further, cutting the policy rate to 1.00% by 1Q 2026,' HSBC economist Aris Dacanay said in a note. Kobsidthi Silpachai, head of Capital Markets Research at Kasikornbank, expects a further cut in December. Sakkapop also said that the central bank will ensure that the baht currency moves in line with economic fundamentals. The baht reversed course to fall 0.1% after the announcement, while Thai stocks extended gains after the decision. Finance Minister Pichai Chunhavajira said the rate cut will boost liquidity and help exporters by weakening the baht, which has firmed more than 6% against a softening US dollar so far this year. In June, the BOT predicted 2025 economic growth of 2.3%, with export growth of 4%, after factoring in US tariff rates of 18%. The economy expanded 2.5% last year, lagging peers. Reuters
Bangkok Post
14-07-2025
- Business
- Bangkok Post
Pundits see SMEs facing tough times
Small and medium-sized enterprises (SMEs) are expected to face increased challenges due to renegotiations concerning the US's reciprocal tariffs, potentially resulting in further closures, according to two research houses. Kasikorn Research Center (K-Research) revealed that SMEs continue to grapple with losses and shutdowns, driven by weak domestic demand and a surge in imports. Between 2021 and 2024, closures of small enterprises, with registered capital of less than 100 million baht, increased by an average of 7% a year. The number of business closures rose from 19,237 in 2021 to 21,764 in 2022, 23,280 in 2023 and to 23,551 in 2024, according to K-Research. During 2020–23, about 106,595 enterprises, or around 26% of all small-sized businesses, reported consecutive losses. K-Research highlighted that SMEs, particularly small enterprises, face mounting challenges amid intensifying pressures. These include the resurgence of trade tensions, increased competition from imported goods in a sluggish domestic market, and longstanding structural issues within the Thai economy. "These challenges have heightened the risk of losses and business closures among local SMEs, especially smaller enterprises," K-Research noted. Sectors where SMEs continue to face competitiveness issues and remain at a high risk of losses or closure include both manufacturing and services, specifically electrical appliances, steel and related products, construction, food services and agriculture. SCB EIC, a research centre under Siam Commercial Bank (SCB), added that if the Thai government agrees to fully liberalise its market for US agricultural and livestock products, such as pork, broiler chickens and corn, it could drive up production costs and weaken domestic competitiveness. "Opening the market could negatively impact domestic industries, particularly small-scale farmers producing these goods. However, consumers may benefit from lower prices," the EIC said. Separately, Sakkapop Panyanukul, assistant governor for monetary policy at the Bank of Thailand, said at a recent monetary policy forum that Thai SMEs remain vulnerable to rising uncertainty from US tariff policies and internal structural challenges. The central bank has been in dialogue with business operators, many of whom have expressed concerns over rising operational costs and weakening competitiveness. However, some have already begun adapting by shifting their focus to new export markets. "For instance, operators in the agricultural sector are transitioning to high-value products and moving into the animal feed industry. Some are seeking export opportunities beyond the US," Mr Sakkapop said. Although several manufacturing sectors continue to report sales growth, many are contending with declining market share. These industries include electrical appliances, furniture, steel and steel products, passenger vehicles, petrochemicals, and textiles and garments.
Malay Mail
01-05-2025
- Business
- Malay Mail
Thai central bank trims rate again, bracing for economic chill from global tensions
BANGKOK, May 1 — Thailand's central bank lowered its key interest rate by 25 basis points for a second straight meeting on Wednesday in support of a slower domestic growth outlook amid global trade uncertainties, Xinhua reported. The Bank of Thailand's monetary policy committee voted 5-2 to reduce the one-day repurchase rate from 2 per cent to 1.75 per cent, bringing borrowing costs to their lowest level in two years. Most committee members viewed the rate cut as necessary to support the flagging economy, address downside risks, and better align financial conditions with the changing economic and inflation outlook, the central bank said in a statement. Secretary of the policy committee Sakkapop Panyanukul said looming risks stemming from the US trade policies and potential retaliatory measures from major economies are expected to reshape the global trade, economic, and financial landscape. 'This process is only beginning and subject to high uncertainties, with the global economy likely to grow at a slower pace and the situation expected to be prolonged,' Sakkapop told a news conference. The Thai economic growth is expected to fall short of earlier projections, with more downside risks due to uncertainty in major economies' trade policies and a decline in tourist numbers, Sakkapop said. He noted that headline inflation is forecast to drop below the central bank's target range, mainly owing to supply-side factors such as falling global crude oil prices and ongoing government subsidies, which partly alleviate costs of living and business expenses. The South-east Asian country's headline inflation growth slowed to 0.84 per cent in March, falling below the central bank's target range of 1 per cent to 3 per cent after staying within the range for three consecutive months. — Bernama-Xinhua
Bloomberg
17-04-2025
- Business
- Bloomberg
BOT To Weigh Tariff Impact on Growth, Rate Path at Next Meeting
Thailand's rate-setters will weigh the impact of US tariffs on the country's growth, inflation and trade as it reviews monetary policy at a scheduled meeting on April 30, according to central bank Assistant Governor Sakkapop Panyanukul. The blow to Thai growth from the global shock spawned by US tariffs 'will not be negligible,' and the pace of expansion will be lower than the 2.5% signaled by the Monetary Policy Committee in February, Sakkapop told a briefing in Bangkok on Thursday.
