Thailand's 2025 Economic Growth Target at Risk, Warns BOT Governor
Bank of Thailand Governor highlights risks to GDP growth following ineffective government stimulus measures in late 2024.
Thailand's economic growth in 2025 faces uncertainty, according to Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, who expressed concerns that the country's GDP growth may fall short of the BOT's target of 2.9%.
The Finance Ministry had previously aimed for a 3% expansion.
Sethaput indicated that GDP growth for 2024 was estimated at 2.7%, and the outlook for 2025 has been dampened by weak consumer spending despite government cash handouts.
The fourth-quarter stimulus, including the 10,000-baht cash handouts, had a limited impact on consumption, with some funds being used to pay off debts rather than boost spending.
The governor also noted that the third phase of the government's digital wallet handout program, set to begin in April, aims to support growth in the first quarter of 2025. However, Sethaput has previously raised concerns that such programs could undermine Thailand's financial stability and credit rating.Regarding inflation, Sethaput forecasted a 1.1% increase for 2025, within the BOT's target range of 1-3%, but expressed concerns over the volatility of the Thai baht.
Despite this, the BOT maintains that its current policy rate of 2.25% is suitable for addressing current economic conditions.
The next meeting of the BOT’s Monetary Policy Committee is scheduled for February 26.Sethaput also referenced the global financial uncertainty posed by the potential return of Donald Trump as U.S. president, though he cautioned that it is too early to determine the precise effects on Thailand's economy.
The Finance Ministry had previously aimed for a 3% expansion.
Sethaput indicated that GDP growth for 2024 was estimated at 2.7%, and the outlook for 2025 has been dampened by weak consumer spending despite government cash handouts.
The fourth-quarter stimulus, including the 10,000-baht cash handouts, had a limited impact on consumption, with some funds being used to pay off debts rather than boost spending.
The governor also noted that the third phase of the government's digital wallet handout program, set to begin in April, aims to support growth in the first quarter of 2025. However, Sethaput has previously raised concerns that such programs could undermine Thailand's financial stability and credit rating.Regarding inflation, Sethaput forecasted a 1.1% increase for 2025, within the BOT's target range of 1-3%, but expressed concerns over the volatility of the Thai baht.
Despite this, the BOT maintains that its current policy rate of 2.25% is suitable for addressing current economic conditions.
The next meeting of the BOT’s Monetary Policy Committee is scheduled for February 26.Sethaput also referenced the global financial uncertainty posed by the potential return of Donald Trump as U.S. president, though he cautioned that it is too early to determine the precise effects on Thailand's economy.
