Thailand’s central bank left its benchmark interest rate unchanged at 1.00% on Wednesday, defying expectations for a modest increase as economic activity showed further signs of weakness.
The Bank of Thailand maintained the rate amid a second-quarter contraction of 0.2% in gross domestic product, according to data released last week. Annual growth slowed to 1.9%, down from 2.8% in the first quarter, reflecting broader softness in the economy.
A survey of 32 economists by LSEG found that 30 respondents anticipated the rate would remain at 1.00%, while two forecast a 25 basis-point increase. The decision underscores the central bank’s cautious stance as it balances inflation risks against sluggish demand.
The benchmark rate has been held at 1.00% since its last adjustment in September 2023, a period marked by persistent economic headwinds. The central bank’s policy committee cited ongoing concerns over domestic demand and external uncertainties in its deliberations.
