Thailand: Central Bank decreases rates in April
Central Bank cuts rates again: At its meeting on 30 April, the Bank of Thailand (BOT) decided to cut the policy rate by 25 basis points from 2.00 to 1.75%. The decision matched February’s cut and market expectations.
Unfavorable GDP and inflation outlooks prompt cut: The decision to cut interest rates was primarily driven by expectations of a weaker GDP growth than previously anticipated, influenced by global trade policy uncertainties and a decrease in tourist numbers. The Bank lowered its 2025 GDP growth projection from 2.9% and sees growth at 2.0% in the event of low U.S. tariffs—the Bank’s core view—and 1.3% under an alternative scenario of higher U.S. tariffs. Moreover, inflation is expected to fall below the 1.0–3.0% target range due to lower oil prices and government subsidies.
BOT turns more dovish: The Bank highlighted that the economic outlook remains highly uncertain due to the potential for changes in U.S. trade policies and retaliations from major economies. In a subsequent press conference, Assistant Governor Sakkapop Panyanukul stated that a weaker growth outlook will lead to a more accommodative monetary policy stance, as well as further scope for further interest rate cuts. Against this backdrop, our panelists see an additional 25 basis points cut by end-2025.
Panelist insight: United Overseas Bank analysts Enrico Tanuwidjaja and Sathit Talaengsatya commented:
“Given the mounting downside risks to the economic outlook, as of now, we expect another 25bps rate cut in June—bringing the policy rate down from 1.75% to 1.50% by the end of 2Q25. This move would help cushion the adverse effects of U.S. tariff measures on growth, anchor inflation expectations, and ease financial conditions. However, additional rate cuts in the remainder of 2025 cannot be ruled out if
downside risks to the outlook—particularly the escalation of global trade tensions—materialize.”
Meanwhile, Nomura analysts were more dovish:
“The policy decision today supports our forecast that the BOT will continue to cut the policy rate to 1.00% by end-2025, amid the worsening growth outlook. […] Importantly, both forecast scenarios of the BOT imply it is now projecting a large and persistent negative output gap. Finally, the BOT shifted to an accommodative stance and is no longer dismissing that this is an easing cycle, all indicating that the BOT has left the door open to more easing, in our view.”