The Bank of Thailand’s monetary policy committee voted unanimously on June 24, 2026, to keep the policy interest rate at 1.0%, maintaining the near four-year low set in September 2022 [1, 2, 3, 4]. The seven-member committee emphasized that the rate remains appropriate to support the country’s economic recovery amid stable inflation within its 1-3% target range [1, 3, 4].
Inflation in Thailand has seen recent fluctuations. After contracting 0.08% year-on-year in March, inflation rose sharply to 2.89% in April, driven by higher energy prices linked to conflict in Iran [1]. The central bank now projects overall headline inflation to average 2.8% in 2026, slightly down from an earlier forecast of 3% but firmly within its target band [3].
Economic growth forecasts were revised upward to 2.3% for 2026 from the previous 2.0%, supported by the government’s announcement of 400 billion baht in additional borrowing to stimulate the economy [3]. Despite this, growth is expected to slow to 1.5% in 2027. The Bank of Thailand noted, “Thailand’s economic expansion is projected to be stronger than previously assessed but growth remains low and uneven,” reflecting lingering challenges [3].
Thailand’s economic output grew 2.4% in 2025, underperforming compared with regional peers [3]. While geopolitical tensions in the Middle East are easing, the Bank cautioned that firm-level cost pass-through and inflation expectations still require close scrutiny due to ongoing elevated costs. “Despite improving developments surrounding the Middle East conflict, cost pass-through by firms warrants close monitoring amid elevated costs, as well as medium-term inflation expectations,” it said [3, 4].
Compared with neighbors such as Japan, Indonesia, and the Philippines, which raised rates in June 2026, Thailand remains among the last major Asian economies to hold a low policy interest rate at 1%, aiming to sustain economic momentum amid global uncertainties [4].
The central bank will continue to monitor inflation and economic growth trends closely, leaving the door open to future adjustments as warranted by evolving conditions [3].
