Thailand: BoT policy risks balanced – Standard Chartered

Standard Chartered economist Tim Leelahaphan expects the Bank of Thailand (BoT) to keep its policy rate at 1.0% through 2026 and 2027, with the BoT prioritising economic growth over inflation. He highlights asymmetric risks around this on-hold call, noting that any hikes would likely be gradual while cuts could be faster if domestic growth slows sharply.

BoT seen on hold through 2027

"We maintain our view that the Bank of Thailand (BoT) will keep its policy rate on hold at 1.0% for the rest of 2026 and 2027, despite possible further hike(s) by the Fed and a recent upward reversal in domestic inflation."

"We see risks to our on-hold call in both directions. The BoT may face pressure to tighten as major and regional central banks raise rates. At the same time, further BoT cuts cannot be ruled out in the event that domestic growth slows sharply."

"We see these risks as asymmetric: Any hikes would likely be gradual, whereas cuts could come faster."

"The updated inflation forecasts may show more gradual disinflation than the sharp decline currently projected; we expect them to remain within the BoT’s 1-3% target range, with inflation mainly supply-side-driven."

"Growth forecasts could be trickier given looming economic uncertainty."