Thailand Keeps Rate at 1% and Lifts 2024 Growth Forecast to 2.1%

Thailand’s central bank held its one‑day repurchase rate at 1.00% while lifting its 2024 growth forecast to 2.1%, citing higher government borrowing and lingering Middle East war risks. The economy expanded 2.4% last year.

Rising oil prices linked to the conflict in the Middle East have increased Thailand’s import bill and added upward pressure on inflation. The Bank of Thailand’s April 29 meeting minutes showed policymakers weighing these external shocks against domestic demand.

They concluded a coordinated policy mix—steady rates plus fiscal support—was needed to sustain growth. Thailand’s expansion has lagged behind regional peers such as Vietnam and Malaysia since the pandemic, making stimulus more critical.

The Monetary Policy Committee voted unanimously to keep the one‑day repurchase rate—the interest rate banks pay for overnight borrowing from the central bank—at 1.00%. Governor Vitai Ratanakorn said the 2024 growth forecast was raised to 2.1% and the 2025 forecast to 1.6%, up from 1.5% and 2.0% previously.

He added that the revision partly reflects the government’s plan to borrow 400 billion baht to boost spending. Thailand’s gross domestic product grew 2.4% in 2023.

Holding rates steady signals the central bank’s confidence that inflation remains manageable despite higher oil costs. The upgraded growth outlook suggests fiscal stimulus from the planned borrowing could offset external headwinds.

Analysts will watch whether the stimulus translates into stronger private consumption and investment. If oil prices stay elevated, the bank may need to reassess its stance later in the year.

Investors should monitor upcoming inflation data, oil price trends, and the pace of government borrowing to gauge the durability of the 2.1% growth target.