By Ben Otto

Thailand's central bank kept its benchmark policy rate at its highest point in a decade, saying that the economy is recovering, while forecasting "more balanced" growth in the years to come.

The Bank of Thailand said Wednesday that it will maintain its one-day repurchase rate at 2.50%, ending a run of eight straight increases that began in August last year. At its previous meeting, the bank had raised the rate to its highest level since November 2013.

The current rate is "conducive to keeping inflation sustainably within the target range, fostering long-term macro-financial stability...and ensuring sufficient policy space in light of uncertain outlook," the bank said in a statement.

The bank's policy committee cut its forecast for economic growth this year to 2.4% from 2.8%. For 2024, it projects growth of 3.2%, or 3.8% when accounting for a government stimulus scheme. That represents a drop from the 4.4% growth forecast previously.

The central bank noted that funding costs in the private sector have risen in tandem with policy rate increases, but said that in its view, this hasn't hindered Thailand's economic recovery.

"The broad trajectory of the economy is one of a continued recovery," driven by private consumption and an improvement in both employment and labor income, the bank said. Merchandise exports and tourism are recovering more slowly than expected, partly due to subdued growth in China, it added.

Looking ahead, it said "growth should be more balanced, as tourism continues to recover and merchandise exports start to expand."

Thailand's economy grew 1.5% on the year in the third quarter, down from the second quarter's 1.8% expansion.

Wednesday's rate decision had been expected by all seven economists surveyed by The Wall Street Journal, with some citing softer inflation in recent months in the Southeast Asian nation. Thailand posted its first deflation in more than a decade in October.

The central bank sees headline inflation at 1.3% this year and 2.0% next year, within its target range, it said Wednesday. Accounting for the stimulus program, it projects inflation of 2.2% next year, down from its previous forecast of 2.6%.

Thailand's parliament in August picked real-estate tycoon Srettha Thavisin as the new prime minister after nearly a decade of army-backed rule. He has promised to boost the economy via stimulus measures, including billions of dollars in cash handouts.

Write to Ben Otto at

(END) Dow Jones Newswires

11-29-23 0315ET