Thai central bank holds policy rate at 1 pct

BANGKOK, Oct. 28 (Xinhua) -- Thailand's central bank kept its key interest rate unchanged for a fourth consecutive meeting on Wednesday as policymakers maintain an accommodative stance and targeted financial measures to support an uneven economic recovery.

The Bank of Thailand's monetary policy committee voted unanimously, with one member absent, to hold the one-day repurchase rate steady at 1 percent, marking its longest pause since the current easing cycle began in October 2024.

"The committee views that the current policy rate is appropriate to support economic recovery," the central bank said in a statement, adding that it would keep watching the inflation outlook and the effects of low interest rates on long-term macro-financial stability.

The bank now expects the Thai economy to grow 2.4 percent this year and 2.1 percent in 2027, up from June forecasts of 2.3 percent and 1.8 percent, citing stronger-than-expected merchandise exports and private investment tied to the global tech and artificial intelligence cycle.

However, growth remains below potential, and the gains are concentrated among businesses and workers in related manufacturing and service industries with limited spillovers to the broader economy, said Don Nakornthab, secretary of the monetary policy committee.

He said private consumption growth was cut to 2.3 percent for this year from 2.6 percent, as high household debt, a fragile labor market, and weak purchasing power weigh on spending.

The central bank also expects foreign tourist arrivals to slip to 32 million this year from 33 million in 2025, partly due to higher oil prices.

Headline inflation is forecast to average 2.1 percent in 2026, down from the 2.8 percent projected in June, and 1.3 percent in 2027, within the bank's 1 percent to 3 percent target range.

Inflation is projected to rise through the rest of this year and into early 2027, driven by energy prices and El Nino, before easing due to base effects and weak domestic demand, the bank said.