Economy Thailand Urged to Cut Interest Rates to Boost Economic Growth

[snoop1130]

Pictures courtesy of Money and Banking Journal

 

Candidate for the Bank of Thailand's (BoT) governor position, Somprawin Manprasert, has called for a more assertive approach to reducing interest rates in light of Thailand’s sluggish growth and low inflation. With the benchmark interest rate at 1.75%, Somprawin suggests a reduction of 75 to 100 basis points could ease financial conditions and stimulate consumer lending.

 

In a recent interview in Bangkok, Somprawin highlighted the necessity for the central bank to clearly communicate an easing cycle, ensuring banks transfer the benefits of rate cuts to consumers. “The current condition of the Thai economy, with projected GDP growth of 1.5% to 1.8% and inflation within target, justifies a policy rate reduction to alleviate financial burdens,” he explained.

 

His proposal aligns with the government’s push for lower rates to fuel economic expansion, contrasting the views of outgoing BoT Governor Sethaput Suthiwartnarueput. Sethaput has been cautious about further easing following 75 basis points in rate cuts since October 2020.

 

Somprawin, previously the chief economist at Siam Commercial Bank’s Economic Intelligence Centre, is one of seven candidates seeking to succeed Sethaput after his term ends on September 30. The selection panel will review candidates' visions on June 24, including competitors like Vitai Ratanakorn of the Government Savings Bank and Kobsak Pootrakool of Bangkok Bank.

 

Finance Minister Pichai Chunhavajira emphasizes the need for a governor who is "forward-looking with modern ideas" supporting government policies. Somprawin asserts that further rate reductions could foster growth and alleviate household and SME debt, echoing Prime Minister Paetongtarn Shinawatra's economic priorities.

 

Sethaput’s term included resisting the Pheu Thai Party-led administration's calls for more rate cuts and opposing higher inflation targets, although recent growth threats from US tariffs led to some easing.

 

Somprawin recommends maintaining strong foreign exchange reserves and diversifying currency use in trade to reduce dependence on the US dollar. With advanced degrees from the University of Warwick and the University of Maryland, he recognizes the role's challenges, advocating for cooperation across policymakers to address Thailand’s economic hurdles.

 

“At this moment, we need all parties to help the Thai economy,” he concluded, emphasizing collective efforts in navigating the nation’s financial landscape.

 

  Adapted by ASEAN Now from The Thaiger 2025-06-06

 

 

[Espanol]

 

For expats living in Thailand, a lower interest rate would mean a cheaper baht, but also higher inflation.

 

 

[ozz1]

Just reduce the baht that will  help but the elites don't care they are getting good things overseas

[Mavideol]

how much lower can they go, BGBK 1.45% sooner rather then later we will have to pay the banks to keep our money there... the guy said and stimulate consumer lending. how can they stimulate consumer spending if the consumer has no money to spend, devaluate the damn baht, exports will rise and will create jobs, people will have some money and they will spend it and the economy will improve

 

Economic effect of a devaluation of the currency

28 July 2019 by Tejvan Pettinger

A devaluation means there is a fall in the value of a currency. The main effects are:

• Exports are cheaper to foreign customers
• Imports more expensive.
• In the short-term, a devaluation tends to cause inflation, higher growth and increased demand for exports.

[ikke1959]

Thailand should update a lot of outdated laws to improve the economic grow.. Just like the protection of several jobs. Thai people don't like to work, and people from other countries are not allowed to do these jobs, like guides... The idea of protectionism is outdated. Let everyone work, and the lazy people will get nothing unless they start to act,. See how many Burmese people are working here now for low costs. All money earned will not be spend in the economy in Thailand but will go to Myanmar..

[connda]

Thailand Urged to Cut Interest Rates to Boost Economic Growth

 

...in order to make the over-extended Thai debt-slaves into a permanent class of feudal commoners.

Hell, banks pay a fraction of a percentage in interest; charge the debt-slaves 30% on their credit cards.
There is something seriously wrong when the government (globally) allow this kind of usury while using depositors funds for next to free. 

[hotchilli]

The present government has done nothing to improve the economy... time for a change of party.

[FlorC]

15 hours ago, connda said:

Thailand Urged to Cut Interest Rates to Boost Economic Growth

 

...in order to make the over-extended Thai debt-slaves into a permanent class of feudal commoners.

Hell, banks pay a fraction of a percentage in interest; charge the debt-slaves 30% on their credit cards.
There is something seriously wrong when the government (globally) allow this kind of usury while using depositors funds for next to free. 

True but you don't have to keep all your money in a bank.

[Purdey]

I guess the principle is that lower interest means that people will yell yippee and borrow money to build businesses. 

I think this may run around and bite banks as borrowers go bankrupt as debt rises no matter the interest. 

I guess the banks are supposed to stop measuring debt levels?