Thailand Cuts Rates, Launches Export-Led Recovery Amid Tariff Pressures

BANGKOK – Thailand’s central bank slashed its policy rate by 25 basis points to a near three-year low of 1.50% as policymakers scramble to reinvigorate growth amid lingering U.S. tariff pressures and weak domestic demand.

The unanimous decision marked the fourth such cut in ten months and came amid widespread economic fragility. The central bank emphasised an accommodative stance to offset a slowdown in consumer spending, declining tourism, and high household debt levels.

Meanwhile, the state planning agency reported that Q2 GDP growth reached 2.8% year-on-year, outperforming forecasts of 2.5%, although growth is expected to decelerate in the second half of the year. The agency narrowed its full-year growth forecast to 1.8%–2.3%, citing a strong export push as exporters rushed to beat mounting U.S. tariffs.

Business groups welcomed the more favourable U.S. tariff rate of 19%, down from an earlier 36%, and raised their growth forecasts to 1.8%–2.2%. This reduction should bolster competitiveness and investor confidence, according to trade bodies.

However, industrial confidence remains weak. The Federation of Thai Industries reported the industrial sentiment index fell to its lowest in three years in July, with concerns over U.S. tariffs and border tensions with Cambodia dampening outlooks.

To buffer the shock, the government approved a THB 18.5 billion ($572 million) stimulus including support for student loans, subsidies, and compensation to victims of the recent border conflict. The finance ministry’s growth projection stands at 2.2%, above some private estimates.