Enrico Tanuwidjaja, Economist at UOB Group, reviews the latest Bank of Thailand (BoT) monetary policy meeting.

Key Takeaways

“Bank of Thailand (BOT) voted unanimously to raise the policy rate by 25bps from 1.50% to 1.75%, bringing its policy rate back to where it was before the pandemic. The next monetary policy board meeting is scheduled on 31 May 2023, a distant later after the scheduled FOMC meeting on 2 May 2023.”

“Confident of sustained growth momentum ahead, underpinned by broad-based tourism recovery (boon for employment and labor income), BOT forecasted the Thai economy to grow at 3.6% in 2023 and further accelerate to 3.8% in 2024.”

“We maintain our view that BOT has reached its terminal rate of 1.75% today and will keep it at the current level for the rest of this year. We pencil in a 25bps rate cut to 1.50% in the early part of next year as growth is expected to slow, along with inflation coming back steadily to BOT’s target range of 1-3%.”