17.12.202507:05:02UTC+00Thailand Cuts Interest Rate by 25 bps as Expected

The Bank of Thailand, as anticipated, reduced its benchmark interest rate by 25 basis points to 1.25% during its policy meeting in December 2025. This marks the fifth rate cut over the past year, cumulatively decreasing the rate by 125 basis points in a bid to bolster an economy challenged by US tariffs, elevated household debt, and a robust baht. The adjusted rate is now at its lowest since December 2022. In terms of economic forecasts, the Bank of Thailand projects a GDP growth of 2.2% for 2025 and 1.5% for 2026. As of the first three quarters of the year, the economy saw a 2.4% expansion. The central bank has also revised its inflation expectations, anticipating headline inflation at -0.1% for 2025, 0.3% for 2026, and 1.0% for 2027, with a gradual return to the target range expected in the first half of 2027. Core inflation is projected to remain stable at 0.8%, 0.8%, and 1.0% over the next three years, respectively.