PUBLISHED : 21 Mar 2025 at 09: 19
Tourists cross a street near the Maharaj-Tha Tien intersection on March 9, 2025. The fading tourism boom could put pressure on the Bank of Thailand to cut interest rate again. (Photo: Apichart Jinakul)
The Bank of Thailand, which has long resisted interest-rate cuts despite immense political pressure, may end up having to embark on the region’s most aggressive easing cycle as a sluggish economy takes a turn for the worse, according to analysts.
The central bank may need to deliver as much as 100 basis points in rate cuts over the next year, according to Nomura Holdings. Bank of America predicts a 75 basis point reduction by 2026. Either prediction would be the most among Southeast Asian central banks.
“Thailand is not only the laggard in the post-pandemic recovery, it is also among the most vulnerable to increased global trade protectionism,” Nomura economist Charnon Boonnuch said. “We think the BoT is increasingly concerned about the weakening growth outlook and is no longer pushing back strongly against more rate cuts.”
The urgency comes as Southeast Asia’s second-largest economy faces even greater headwinds as Donald Trump’s trade war escalates and the tourism boom fades. That adds to longstanding problems — an ailing manufacturing sector, mounting household debt and sluggish consumption —
Read More