Bangkok: Krungthai Bank expects the Monetary Policy Committee (MPC) to cut interest rates again this year due to the high uncertainty in the economy. The bank is closely monitoring the outcomes of ongoing negotiations with the United States.

According to Thai News Agency, Krungthai Bank highlighted that during the MPC meeting held on June 25, 2025, the committee voted 6:1 to maintain the interest rate at 1.75% per year. This decision was influenced by the Thai economy's stronger than anticipated performance in the first half of 2025, spurred by continuous export growth positively impacting certain manufacturing sectors despite geopolitical risks, border conflicts, and political uncertainty.

The MPC has subsequently revised its GDP growth forecast for 2025 upward from an earlier projection of 2.0% to 2.3%. The committee believes that the economy is unlikely to expand below 2% unless there is a significant global economic shock. Headline inflation is expected to remain below the target range's lower bound due to supply-side factors, although tight financial conditions and increased credit risks require ongoing attention.

Krungthai Bank assesses that a potential reduction in the policy interest rate to 1.50% by 2025 is possible, contingent on the uncertain economic environment. This decision will depend on the results of negotiations with the United States, given the unclear progress in Thailand and the impact on energy prices following the re-escalation of conflict in the Middle East.