Standard Chartered economist Tim Leelahaphan anticipates that the Bank of Thailand (BoT) will maintain its policy rate at 1.0% throughout 2026 and 2027, prioritizing economic growth over inflation concerns [1]. Leelahaphan notes that while the BoT is expected to keep rates steady, there are asymmetric risks to this outlook: any potential rate hikes would likely be gradual, whereas rate cuts could occur more swiftly if domestic economic growth slows sharply [1].
The economist highlights that the BoT may face pressure to tighten monetary policy if major and regional central banks raise rates, especially in light of possible further hikes by the U.S. Federal Reserve and a recent upward reversal in domestic inflation [1]. However, the possibility of rate cuts remains if Thailand's domestic growth deteriorates significantly [1].
Standard Chartered expects updated inflation forecasts to indicate a more gradual disinflation process than previously projected, but still within the BoT’s 1-3% target range, with inflation primarily driven by supply-side factors [1]. Growth forecasts, however, are described as more uncertain due to ongoing economic challenges [1].
No specific market reactions or analyst opinions beyond Standard Chartered's outlook are mentioned in the article [1].
CONCLUSION
Standard Chartered projects that the Bank of Thailand will keep its policy rate unchanged at 1.0% through 2027, balancing the risks of inflation and economic growth. While gradual rate hikes are possible if external pressures mount, faster rate cuts could occur if domestic growth weakens. Inflation is expected to remain within target, but economic uncertainty persists.