Amid recent economic indicators signaling robust GDP growth in Thailand’s first quarter, research firms are revising their predictions on the Bank of Thailand (BOT)’s policy rate adjustments. The National Economic and Social Development Council (NESDC) reported a 1.5% year-on-year GDP increase, surpassing expectations from Kasikorn Research Center (KResearch) and CIMB Thai Bank (CIMBT).
KResearch, which initially forecasted GDP growth between 0.6-0.8%, now suggests the central bank will maintain its policy rate at 2.5% until year-end. This contrasts with their previous anticipation of rate cuts in the second half of the year. Additionally, KResearch has adjusted its 2024 GDP growth forecast to 2.6%, aligning with NESDC’s revised projections.
CIMBT, which estimated first-quarter GDP growth at 0.8%, expects the central bank to delay the policy rate cut until December, forecasting only a single 25-basis-point reduction in 2024. This is a departure from their earlier expectation of two cuts. The revision is partly influenced by local banks’ decision to lower the minimum retail interest rate (MRR), easing customers’ debt repayment burden and delaying policy rate adjustments.
In response, CIMBT contemplates revising its 2024 GDP growth forecast upward from the current 2.3%, contingent upon forthcoming economic developments and the impact of fiscal budget disbursement.
NESDC has revised its 2024 GDP growth projection to 2%-3%, slightly lower than its earlier forecast of 2.2%-3.2%. Concerns over escalating trade protectionism, geopolitical conflicts, and global economic volatility underpin this adjustment.
