Bank of Thailand Holds Rates Unexpectedly

The Bank of Thailand kept its benchmark interest rate unchanged at 1.5% during its October 2025 policy meeting, defying market expectations of a cut to 1.25% and remaining at its lowest level since February 2023. Headline inflation is now forecast at 0% in 2025 and 0.5% in 2026, with a gradual return to the central bank’s 1%–3% target band anticipated by early 2027. The core inflation rate is expected to remain stable at 0.9% in both 2025 and 2026. Consumer prices in Thailand declined by 0.72% year-on-year in September 2025, marking the sixth consecutive month of deflation and remaining well below the central bank’s target range. Meanwhile, Thailand’s GDP is projected to grow by 2.2% in 2025 and 1.6% in 2026. The country's economy expanded by 2.8% year-on-year in Q2 2025, representing the slowest pace of growth since Q2 2024. Finally, the MPC reaffirmed its accommodative stance and signaled its readiness to adjust policy in response to evolving economic and inflation conditions.