Bank of Thailand Expected to Hold Rates Amid Instability

The Bank of Thailand (BOT) is expected to maintain its policy rate at 2.5% at its upcoming meeting, despite ongoing political instability and economic challenges. Analysts, including those from Kasikorn Research Center and Maybank, predict a steady rate through 2024, with potential easing in 2025 if global central bank trends shift. Inflation remains below the BOT's target range, and economic growth is slow and uneven, averaging 1.9% in the first half of 2024. The new Prime Minister, Paetongtarn Shinawatra, has called for a reassessment of a $14 billion digital wallet handout. Political uncertainties and the weak Thai baht further complicate the outlook, with some economists seeing a possibility for a rate cut if economic risks escalate. The BOT's decision will also consider the U.S. Federal Reserve’s anticipated policy easing in September.