BoT tipped to slice interest rates as inflation and exports wobble
Economic jitters and tourist drop-offs set scene for more monetary easing

Thailand’s top money men are sharpening their scissors, with experts betting the Bank of Thailand (BoT) will slash interest rates at least twice more this year to prop up the faltering economy, rocked by a US trade war and dwindling tourist numbers.
In a shock twist, April saw the consumer price index (CPI) shrink by 0.22%, the first drop in over a year and double what analysts had forecast, according to data from the Commerce Ministry. KGI Securities (Thailand) had pencilled in a milder 0.1% dip.
Burin Adulwattana, Managing Director and Chief Economist at Kasikorn Research Centre (K-Research), reckons the writing’s on the wall for another rate cut.
“The US tariffs would significantly impact Thai exports as tourism has begun to slow down.”
The BoT already made a move on April 30, trimming its key interest rate by 25 basis points to 1.75%, the lowest in two years, in a bid to breathe life into a sluggish economy. That marked the second cut in a row.
Burin added, “The decline in tourist arrivals could prompt the central bank to trim the rate further, with at least one more reduction this year.”

K-Research expects Thai exports to cool off this quarter, even with US President Donald Trump’s 90-day tariff freeze, thanks to earlier front-loaded shipments. A contraction later in the year remains likely, should Washington ramp up tariffs again.
Krungsri Securities (KSS) is also backing more cuts. The brokerage sees “at least two more” rate reductions in 2025, pointing to economic headwinds and soft inflation.
“We assess Thailand has not yet reached deflation,” KSS analysts noted in a research report, but flagged that inflation is set to keep sliding, partly due to an influx of goods tied to retaliatory US tariffs, keeping price growth under the central bank’s target.
Meanwhile, Malaysia-based Maybank has cut its forecasts for Thai headline and core inflation this year to just 0.5% and 0.8% respectively, from earlier estimates of 1%. That’s on the back of weak domestic demand, global shocks, and oversupply in manufacturing.
Next year’s outlook isn’t much rosier, headline and core inflation are seen at 0.8% and 1%, respectively, down from previous forecasts of 1.1%.
Maybank predicts inflation will average -0.1% in Q2 before recovering to 0.5% in the second half of 2025 as the impact of sky-high energy prices fades.
“With prior export frontloading, first-quarter GDP growth is likely to register 2.7%.”
Maybank added that the BoT is expected to hold fire in June while it gauges the fallout from Trump’s tariff threats, before another 25-point cut in Q3.
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