KResearch Predicts Bank of Thailand to Maintain Interest Rate at 1.25%

Kasikorn Research Center (KResearch) revealed on February 20, 2024, that in the upcoming Monetary Policy Committee (MPC) meeting on February 25, they expect the committee to maintain the interest rate at 1.25%. This prediction comes after Thailand's Q4/2023 economy expanded better than anticipated and political risks decreased following election results. They also estimate that the MPC is likely to reduce the policy interest rate once to 1.00% this year, potentially during the June 2024 meeting. This decision will await the assessment of Q1/2024 GDP figures expected in May 2024, which are predicted to significantly slow down and potentially represent the year's lowest point. While the Thai economy may gradually recover in the second half of 2024 if a government is quickly formed and additional economic stimulus measures are implemented, the economy still faces multifaceted risks, and credit is expected to continue contracting. Additionally, the MPC's reduced membership of 6 instead of 7 members may make the meeting's balance of opinions more sensitive, with potential 3-3 vote splits requiring the chair's decisive vote.