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Edited Minutes of Monetary Policy Committee Meeting (No. 4/2026)  
21 and 26 August 2026, Bank of Thailand 
Publication Date: 9 September 2026 
Members Attendings 
Vitai Ratanakorn (Chairman), Piti Disyatat (Vice Chairman), Suwannee Jatsadasak, Paiboon 
Kittisrikangwan, Charl Kengchon, Sauwanee Thairungroj, and Somchai Harnhirun 
Economic and Inflation Assessment 
The Thai economy was projected to expand broadly in line with the previous assessment , 
supported  by the continued momentum of the technology and artificial intelligence (AI) 
cycle , which contributed to  stronger -than -expected growth in merchandise exports and 
private investment. Private consumption, however, moderated relative to earlier projections 
as elevated living costs  contributed to greater spending restraint among households . 
Consumption  was expected to temporarily strengthen in the third quarter of this year, 
buoyed by government measures, before moderating in the fourth quarter as these measures 
expired. Looking ahead, private consumption was expected to recover in 2027, supported  
by lower living costs  following declines in  energy prices and a gradual improvement in 
household income. 
Nevertheless, overall growth remained low and uneven. This reflected (1) continued strong 
growth in merchandise exports being concentrated in AI-related products , which had high 
import content, while exports of other products remained subdued, partly  due to declining 
competitiveness; (2) improvements in private investment being driven mainly by technology-
related sectors and data centers , which generated more  limited spillovers to employment 
and domestic value added than previous investment cycles as these sectors were less  
labor-intensive and relied  heavily on imports ; and (3) SMEs continuing  to face challenges  
in adjusting their business models amid persistent competitiveness pressures. 
The Committee viewed that the technology and AI cycle would continue to support 
merchandise exports and related investment over the next one to two years. However,  
the benefits to the Thai economy could remain limited , depending on businesses’ ability  
to integrate into supply chains, adopt technology to enhance productivity, and create 
greater value added. In addition, Thailand should maintain its competitiveness and 
attractiveness as a destination for foreign direct investment (FDI), which would help support 
economic growth. The Secretariat noted that the technology cycle was currently  in the AI 
infrastructure build -out phase, as reflected in  investment plans by leading  technology 
companies  and projects approved by the Board of Investment (BOI). These developments 
were expected to continue supporting merchandise exports and private investment for  
some time before gradually moderating as the technology cycle transitioned toward the AI 
adoption phase. Going forward, it would be  important to monitor the extent to which the 
benefits of this transition spill over to other sectors of the economy, as well as the gains that 
Thailand could derive from the adoption of AI-related technologies.  
The Committee expressed concern over private consumption, which remained under 
pressure  from elevated living costs, a sluggish income  recovery, and vulnerable  balance 
sheets stemming from high household debt. The Committee noted that the Thai economy 
faced more frequent shocks in recent years, which weakened the financial positions of both 
businesses and households. In addition, concentrated economic growth resulted in only  -2- 
 
a gradual recovery in household  income, while living costs increased substantially.  
The Committee therefore deemed it necessary to closely monitor household purchasing 
power amid an uneven economic recovery, particularly among low-income households. 
Headline inflation was expected to increase tempor arily due to supply -side factors,  but  
by less than previously assessed . This lower trajectory was driven by  reduced  domestic 
energy prices from the second quarter , following declines in global crude oil prices and 
domestic energy price support measures, as well as lower-than-expected cost pass-through. 
However, headline inflation from late 2026 to early 2027  was expected to remain at a high 
level , partly owing to  domestic energy prices and the impact  of El Niño phenomenon   
on fresh food prices . Thereafter, headline inflation was expected to  decline to a low level  
due to  base effects  and limited demand -side  pressures amid economic growth  below  
its potential. Meanwhile, core inflation was projected to be lower than previously assessed, 
reflecting lower-than-expected cost pass -through by businesses due to subdued domestic 
demand and easing cost pressures. This was consistent with  (1) business survey results 
indicating an increase d proportion of firms with no plans to raise prices 1 and (2) a decline  
in short-term inflation expectations. Medium-term inflation expectations remained anchored 
within the target range. 
The Committee noted  that uncertainty surrounding the conflict in the Middle East 
remained elevated and could prompt renewed upward pressure on global oil prices .  
The Committee noted that the decline in global oil prices in recent periods partly reflected 
inventory drawdowns  in several countries to offset supply shortfalls, which left global oil 
reserves at depleted levels. Moreover, prolonged disruptions to energy transportation routes 
from the Middle East could lead to a renewed and sharp increase in global oil prices.  
The Secretariat explained that, although assumptions for global oil prices were revised 
downward, prices remained above pre -war levels. Additionally, e levated uncertainty 
surrounding the conflict was expected to continue exerting upward pressure on global 
energy prices for some time. Meanwhile, remaining global oil inventories could help cushion 
against  sharp increases in oil prices for approximately one to three months . Thereafter, 
supply chain  adjustments would require close monitoring . The Committee deemed it 
necessary to closely monitor global energy price developments and outlooks, the financial 
status of the Oil Fuel Fund in stabilizing domestic energy prices, as well as their implications 
for inflation outlook going forward. 
Financial Conditions and Financial Stability Assessment 
The Thai baht against the U.S. dollar moved broadly in line with regional currencies.  
Its movements were volatile , driven  by geopolitical developments in the Middle East and 
shifting market expectations regarding the Federal Reserve’s monetary policy trajectory . 
Since the beginning of the year, the baht was among the regional currencies that depreciated, 
reflecting Thailand’s structural dependence on energy imports. Meanwhile, Thai bond yields 
remained broadly stable amid lower domestic inflation risks, despite rising bond yields  
in major economies. Some members noted that Thai bond yields remained at low levels and 
have  declined relative to U.S. bond  yields, partly reflecting the high share of domestic 
investors in the government bond market, which contributed to lower sensitivity to external 
 
1 According to the Business Sentiment Index Special Survey (BSI Special), the share of firms reporting that they 
would “not raise prices” or would “lower prices” over the next three months relative to the increase in costs 
rose from 44 percent in June 2026 to 62 percent in August 2026. -3- 
 
factors  in recent periods.  Nevertheless, it was important  to closely monitor bond yield 
developments, as the recent increase in demand was concentrated among certain investor 
groups, particularly financial institutions. 
Overall credit has picked up , driven primarily by lending to large corporates.  Part of this 
lending  was in line with  economic activity and associated with a new wave of  investment.  
However, most of the increase was attributable to  demand for working capital to support  
business liquidity, accommodate higher costs, and finance overseas acquisitions. Nevertheless, 
SME loans continued to contract across almost all business sectors, as financial institutions 
remained cautious in extending credit to high-risk borrowers. Overall loan quality remained 
broadly stable . However, the debt repayment ability of SMEs warranted close monitoring, 
particularly among existing vulnerable groups and borrowers with persistent financial 
difficulties who were currently under financial institutions ’ relief measures. The Committee 
emphasized the role of the financial sector in supporting liquidity for high-potential SMEs. 
In this regard, the Committee encouraged financial institutions to provide greater support for 
vulnerable borrowers and SMEs through targeted financial measures, while facilitating access 
to credit at appropriate costs for high-potential SMEs to support business ad aptation and 
continued operations. 
Monetary Policy Consideration 
• Under the prevailing monetary policy framework aimed at maintaining price  
stability, supporting sustainable economic growth, and preserving financial stability, 
the Committee agreed that maintaining an accommodative monetary policy stance, 
together  with targeted financial measures, had helped support the economic 
recovery. The Committee discussed the following key issues: 
▪ Inflation was proje cted to be lower than previously assessed,  owing to 
lower-than-expected energy prices and cost pass -through. However, risks to 
inflation remained from high uncertain ty surrounding the conflict in the 
Middle East. 
▪ The economy was projected to expand broadly in line with the previous 
assessment, supported by continued momentum from the technology and AI 
cycle. Nevertheless, economic growth remained low and uneven. 
▪ Overall credit expanded, driven primarily by lending to large corporates, 
while SME loans continued to contract across almost  all business sectors.  
Financial institutions remained cautious in extending credit to high -risk 
borrowers. 
• The Committee viewed that monetary policy should remain  accommodative to 
support  the econom ic recovery , complemented by  a coordinated policy mix to 
address structural economic challenges in a sustainable manner. The implementation 
of accommodative monetary policy, in conjunction with  fiscal policy and targeted 
financial measures, would help sustain household purchasing power and facilitate  
business adjustment in the short term. Looking ahead, however, policies should place 
greater emphasis on economic restructuring, productivity  enhancement , and 
strengthening business competitiveness. 
• The Committee judged  that  although  policy space remained , further monetary 
policy easing in a non -crisis environment might yield limited additional benefits -4- 
 
relative to its potential side effects. This was because the  transmission of monetary 
policy faced growing constraints. At the same time, maintaining interest rates at low 
level s for an extended period could generate unintended consequences and 
narrowing  monetary policy space. Furthermore , structural economic challenges 
should be addressed through other government policies, including measures to 
strengthen business competitiveness and targeted financial measures, in order to 
maximize policy effectiveness. 
• The Committee discussed the risks associated with maintaining interest rates at  
a low level for an extended period, or a low -for-long environment , noting that  
although there were currently no significant signs of financial stability risks  building 
up, the side effects of keeping interest rates low for an extended period warranted 
close monitoring. These side effects included:  (1) the buildup of vulnerabilities  in  
the economic and financial system . Although low interest rates could support 
economic growth in the short term, they could also contribute to the buildup of 
financial stability risks, including excessive debt accumulation , which could weigh on 
economic growth in the long run, reflecting intertemporal trade-offs; and (2) resource 
misallocation.  When interest rates, which represent ed the cost of capital, remain ed 
low, the minimum rate of return expected by firms and investors, or the hurdle rate, 
could also decline . This could encourage capital deployment  in projects with low 
returns and productivity, thereby weighing on  the economy’s long -term growth 
potential. 
• The Committee viewed that preserving policy space remained important amid 
heightened  economic uncertainty.  The economy could face risks from a range of 
factors , including geopolitical conflicts, trade protectionist measures, risks to  
the global financial system arising from the  reassessment of technology and AI 
valuations, and fiscal risks in several countries. Given that the current policy rate  
was low relative to historical levels , the Committee viewed that it was important  
to preserve policy space to respond to unexpected shocks going forward. 
Monetary Policy Decision 
The Committee voted unanimously to maintain the policy rate at 1.00 percent. 
The Committee deemed it appropriate to maintain the policy rate at this meeting. The 
Committee assessed that an accommodative monetary policy stance, coupled with targeted 
financial measures, had helped support the economic recovery. Nevertheless, developments 
surrounding the conflict in the Middle East, trade protectionist measures, and risks to 
inflation going forward warranted close monitoring. 
Looking ahead, the Committee viewed that the current policy rate was appropriate to 
support the economic recovery, while inflation was projected to increase temporarily due to 
supply-side factors . The Committee would continue to monitor the inflation outlook and 
associated risks going forward. 
 
Monetary Policy Group 
9 September 2026 