08.07.202603:22:47UTC+00Bank of Thailand Warns on Fiscal, Monetary Headroom: June Minutes

Thailand’s economy is receiving short-term support from accommodative monetary policy and government stimulus, according to minutes from the Bank of Thailand’s June meeting. Policymakers stressed, however, that durable growth will depend on deeper structural reforms aimed at strengthening the country’s competitiveness. Some board members cautioned that keeping policy too loose for too long could diminish fiscal and monetary policy space, put downward pressure on Thailand’s sovereign credit rating, and increase financial vulnerabilities in a prolonged low-interest-rate environment. While economic growth is now expected to exceed earlier projections, the recovery remains uneven: exports and investment are leading the upturn, whereas household consumption is being held back by slower income growth and rising living costs. Inflation is projected to rise modestly due to supply-side pressures, but officials judged the risk of significant second-round effects to be limited, with medium-term inflation expectations remaining firmly anchored within the target range.