Thailand’s 2025 economic growth target in jeopardy: BOT chief

FRIDAY, JANUARY 31, 2025

Bank of Thailand (BOT) governor Sethaput Suthiwartnarueput has expressed worry over the country’s economic growth this year after the government handout scheme failed to lift consumption in the fourth quarter of 2024. 

Thailand’s 2025 GDP growth risked falling below the BOT target of 2.9%, Sethaput told Reuters on Thursday. The Finance Ministry has targeted 3% expansion.

The BOT chief estimated last year’s GDP growth at 2.7%, adding that this year’s figure would be affected by negative sentiment due to several factors.

“Cash handouts and economic stimulus measures had a lower impact on the economy than expected,” Sethaput said. He added that some of the 10,000-baht cash handouts were used for debt repayment rather than consumption.

He noted that the third phase of the government’s digital wallet handout scheme will kick off in April, aiming to kickstart economic growth in the first quarter. The BOT chief has previously expressed opposition to the scheme, warning it could impact Thailand’s financial stability and credit rating.

Sethaput expects inflation rate to reach 1.1% this year, in line with BOT’s target of 1-3%. However, he expressed concerns over baht volatility.

“We feel ... when you take it all together, the current policy rate is appropriate for striking the right balance for those things," he told Reuters. “That said, if things change, we are prepared to change,” he said.

The BOT’s Monetary Policy Committee maintained the policy interest rate at 2.25% in December. The next meeting is scheduled for February 26.

Sethaput also noted that the return of Donald Trump as US president would trigger more uncertainty in the global financial sector, but said it was too soon to gauge the impact on Thailand.