BOT warns of increased currency volatility in 2025

 

The Bank of Thailand (BOT) has forecast increased volatility for the Thai baht in 2025, citing external economic factors and emerging challenges.

 

Speaking at the first monthly briefing of this year, Sakkapop Panyanukul, assistant governor of the BOT's Monetary Policy Group, highlighted growing uncertainties in the Thai economy. 

 

He pointed to intensifying geopolitical tensions and unpredictable policies of major trading partners as key concerns, with US economic policy expected to have particular impact in the latter half of the year.

 

 

The manufacturing sector faces additional pressures from increased international competition, particularly affecting the automotive and auto-parts industries. 

 

 

BOT deputy governor Piti Disyatat noted that these challenges could affect more than a million workers in Thailand's automotive sector, potentially impacting domestic spending.

 

 

 

          Economic Outlook

Pranee Sutthasri, senior director of the BOT's Macroeconomics Department, projected 2.9% economic growth for 2025, driven by both domestic and foreign demand. The forecast includes:

• 39.5 million foreign tourist arrivals
• 2.7% growth in exports
• 1.7% increase in imports

 

The economy is expected to benefit from government stimulus measures, including Phases 2 and 3 of the digital money scheme and various tax deductions. However, Pranee cautioned that while exports might strengthen in the first half of 2025, US trade barriers could slow growth in the second half.
 

 

 

          Inflation and Credit

Surach Tanboon, senior director of the Monetary Policy Department, reported that headline inflation is projected at 1.1%, remaining within target ranges. 

 

He noted a slowdown in lending, attributing this to reduced loan demand and businesses becoming less reliant on credit after Covid-19-related borrowing.

 

The BOT indicated that its monetary policy will maintain a careful balance between supporting economic stability and addressing high household debt levels. Officials emphasised the need for robust yet cautious policies, particularly given the uneven nature of the economic recovery across different sectors.

 

The tourism and services sectors have shown strong recovery, while electronics and automotive industries continue to face challenges. The central bank stressed that it would closely monitor both domestic and international developments to adjust its policy tools accordingly.