Baht, oil prices expected to face volatility in 2025: NESDC

The baht is expected to move between 34.5 and 35.5 to the US dollar next year, similar to an average of 35.4 baht this year.

The Thai currency is expected to face high volatility driven by US economic policies that would affect the Federal Reserve’s monetary policies to curb inflation.

The baht could strengthen because of the Fed’s reduction of its policy interest rate, the NESDC said. It added that US economic policies would pressure the Fed to delay reducing interest rates to tackle inflation, causing the baht to weaken.

As for oil prices, the NESDC expects Dubai crude to move between US$75 and $85 per barrel next year, similar to an average of $80 per barrel this year.

The council noted that oil prices could rise because of prolonged conflict in the Middle East and a decline in US oil rigs, which could affect the global fuel supply.

However, negative factors that could pressure oil prices include a decline in fuel demand amid a US-China trade war and clean-energy transition, as well as the OPEC+ plan to increase crude-oil production capacity, the council said.

The NESDC expects the Thai economy to expand by 2.3-3.3% compared with 2.6% expansion this year. Thai inflation is expected to move between 0.3% and 1.3%, while the current account is projected to have a 2.6% surplus, the council added.