On June 24, at the Bank of Thailand (BOT), Mr. Don Nakornthap, Secretary of the Monetary Policy Committee (MPC), announced the results of the MPC meeting on June 24, 2026.
The committee voted unanimously (7-0) to maintain the policy interest rate at 1.00% per annum.
The Thai economy is expected to expand at a higher rate than previously assessed, but the growth rate remains low and uneven. Meanwhile, inflation is likely to increase due to supply-side factors but is expected to decline after supply-side factors gradually ease. Overall credit expansion is low, requiring monitoring of loan quality for SMEs and vulnerable households.
The committee viewed that the accommodative monetary policy, together with targeted financial measures, supports economic recovery. Therefore, it deemed appropriate to keep the policy rate unchanged at this meeting, but inflation and medium-term inflation expectations must be monitored.
For 2026, the Thai economy is projected to grow by 2.3% (from a previous estimate of 1.5%), and for 2027 by 1.8% (from 2%), driven by stronger-than-expected exports and investment related to the technology and artificial intelligence cycle, government measures to mitigate the impact of the energy crisis, and improving prospects for the Middle East conflict.
However, the impact of the conflict on the manufacturing and tourism sectors is less than assessed, with large businesses adapting better than expected. Nevertheless, overall economic growth remains low and uneven, with SMEs having limited ability to adapt and facing intense competition, while most households are pressured by slowing income and rising living costs, which will restrain private consumption after government measures end.
Headline inflation for 2026 and 2027 remains close to previous assessments, averaging 2.8% and 1.4% respectively. Inflation in the remaining period of 2026 will be above the target range due to the pass-through of energy prices and costs, before declining in 2027 as supply-side factors gradually ease and due to a high base effect. Core inflation for 2026 and 2027 is close to previous assessments, averaging 1.5% and 1.4% respectively.
Medium-term inflation expectations remain anchored within the target range. Although the conflict situation is likely to improve, the pass-through of high costs by businesses and medium-term inflation expectations must be monitored.
The baht against the US dollar has depreciated due to the strengthening of the US dollar in line with US monetary policy. Overall interest rates in the financial system are stable, and overall loan expansion is low, mainly driven by large business loans.
SME loans continue to contract, as financial institutions remain cautious in lending to risky borrowers. Overall loan quality is stable, but the debt repayment ability of SME and vulnerable household borrowers must be monitored going forward, along with continued support for targeted financial measures to assist vulnerable groups.
Under the monetary policy framework aimed at maintaining price stability, supporting sustainable economic growth, and preserving financial system stability, the committee viewed that the current policy rate is appropriate to support economic recovery, while inflation is rising due to supply-side factors, but inflation trends and risks must be monitored going forward.
