Thailand Eyes Long-Term Investment Push Amid Fed Rate Hike
Thailand is preparing long-term investment strategies to counter risks from the U.S. Federal Reserve's first interest rate increase in three years, which officials warn could push up domestic borrowing costs and destabilize global markets.
At 9:25 a.m. on September 18, 2025, at Government House, Danucha Pichyanan, secretary-general of the National Economic and Social Development Council, addressed measures to counter potential impacts following the U.S. Federal Reserve's decision to raise interest rates by 0.25 percent—the first increase in three years. He said the rate hike is not welcome news because it will increase global market risks.
Thailand's response through the Bank of Thailand requires careful consideration of policy options, as it may push domestic rates higher. Given the interest rate gap between Thailand and foreign markets, authorities must also determine how to attract investment funds.
When asked how government agencies are preparing, Danucha said all relevant units already have response policies in place. However, he personally believes the focus should be on investment, prioritizing long-term planning. If preparations are sound, shocks will have limited impact and can be managed. He also flagged the need to prepare for flooding and drought to prevent a recurrence of current crises.
Regarding potential transport cost impacts from higher energy prices, Danucha noted that preliminary funding mechanisms and agency-level measures are already operational. He acknowledged, however, that the government cannot make fuel affordable for everyone. Market forces will prevail, and daily-wage earners may be hit hardest. The public, private, and government sectors must all prepare. The government is currently pursuing an energy transition, though the exact method remains to be seen.
