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Bank of Thailand holds at 1.00%, nudges 2026 growth forecast up to 2.4% and cuts its inflation forecast

Published Data as of ThailandMacro & householdsSME
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Key points

Implications for lenders

With the policy rate at 1.00% and private loan rates broadly in line with it, funding costs for Thai lenders may stay near current levels. The committee reports credit growth led by large-corporate lending while SME loans contract, so SME and low-income retail lenders may need tighter affordability checks and early-arrears monitoring. A rise in headline inflation into early 2027 could squeeze borrowers' real incomes and repayment capacity.

Implications

ExecutivesFunding costs tied to the policy rate are unlikely to fall in the near term, so pricing plans for 2027 can assume roughly current benchmark rates.
InvestorsA growth upgrade alongside continued SME credit contraction points to earnings support from corporate lending rather than retail and SME books.
OperatorsThe central bank is flagging SME and vulnerable-household repayment ability, so collections and restructuring capacity remain a priority.

Facts

The decision: the Bank of Thailand's Monetary Policy Committee (MPC) held the one-day repurchase rate at 1.00% 1 at its fifth meeting of 2026, on 28 October, unchanged from the 26 August 2026 decision. The vote was unanimous; one member was absent. The committee described the stance as accommodative, coupled with targeted financial measures, without detailing those measures.

Forecasts: the MPC now projects real GDP growth of 2.4% in 2026 2, up from 2.3% in the June 2026 projection, and 2.1% in 2027 3, up from 1.8% in the June 2026 projection. Headline inflation is projected to average 2.1% in 2026 4, down from 2.8% in the June 2026 projection, and 1.3% in 2027 5, down from 1.4% in the June 2026 projection; core inflation 1.2% in 2026 6, down from 1.5% in the June 2026 projection. The committee expects headline inflation to rise through early 2027 before returning to low levels, and cites El Niño as a risk.

Credit and households: according to the statement, overall credit growth has picked up, led by loans to large corporates, while SME loans continue to contract across most sectors. Elevated household debt, a weak labour market and weak purchasing power constrain private consumption. Borrowing costs on private-sector loans have stayed broadly in line with the policy rate, and the baht has weakened against the US dollar as expectations for US monetary policy shifted and oil prices rose.

Analysis

The Bank of Thailand's growth projection is now above other official forecasters: the IMF's October World Economic Outlook has 2.1% for 2026 7, the ADB 2.0% 8 and the World Bank 2.0% 9. The upgrade is small, and the committee still calls growth low and uneven.

On prices, the lower 2026 inflation projection sits inside the 1–3% target range 10, but monthly headline inflation has moved up since July, reaching 2.82% in September 11, up from 2.53% in August (chart). With a projected rise into early 2027, the room for a further cut depends on how temporary that rise proves.

The credit split the committee describes matches the latest bank data: in Q2 2026 lending to large corporates grew 6.6% year on year 12, while SME lending changed by −4.6% 13, with total bank loan growth at 2.0% 14. A steady policy rate does little to reopen credit to smaller borrowers when lenders' caution, rather than price, limits supply.

Headline CPI inflation, year on year (%)
01232.792026-052.422026-061.952026-072.532026-082.822026-09
Headline CPI inflation, year on year (%)
2026-052.79
2026-062.42
2026-071.95
2026-082.53
2026-092.82

Year-on-year change in the headline consumer price index, Ministry of Commerce (TPSO) · Source: Ministry of Commerce (TPSO) monthly CPI releases as reported by Xinhua, Kaohoon International and The Nation (2026-05, 2026-06, 2026-07, 2026-08, 2026-09)

Counterpoints and uncertainties

The committee's inflation path assumes the rise into early 2027 is temporary; higher oil prices, El Niño effects on food or further baht weakness could keep inflation higher and remove room for easing. Conversely, the growth upgrade is small and other forecasters are lower, so a weaker outcome could revive pressure for a cut. The statement does not specify the targeted financial measures it refers to.

Key figures

  1. Bank of Thailand policy rate: 1.00% (unchanged from the 26 August 2026 decision). One-day repurchase rate set by the BOT Monetary Policy Committee. Thailand, BOT Monetary Policy Committee. Basis date: 28 Oct 2026. Source: Bank of Thailand: Monetary Policy Committee's Decision 5/2026 (2026-10-28)
  2. BOT GDP growth forecast for 2026 (October 2026): 2.4% (up from 2.3% in the June 2026 projection)
    June 2026 figures from MPC Decision 3/2026 (24 June 2026); the August 2026 decision gave no numeric forecasts.
    . Real GDP growth projected for 2026 by the BOT Monetary Policy Committee. Thailand, BOT Monetary Policy Committee. Basis date: 28 Oct 2026. Source: Bank of Thailand: Monetary Policy Committee's Decision 5/2026 (2026-10-28)
  3. BOT GDP growth forecast for 2027 (October 2026): 2.1% (up from 1.8% in the June 2026 projection)
    June 2026 figures from MPC Decision 3/2026 (24 June 2026); the August 2026 decision gave no numeric forecasts.
    . Real GDP growth projected for 2027 by the BOT Monetary Policy Committee. Thailand, BOT Monetary Policy Committee. Basis date: 28 Oct 2026. Source: Bank of Thailand: Monetary Policy Committee's Decision 5/2026 (2026-10-28)
  4. BOT headline inflation forecast for 2026 (October 2026): 2.1% (down from 2.8% in the June 2026 projection)
    June 2026 figures from MPC Decision 3/2026 (24 June 2026); the August 2026 decision gave no numeric forecasts.
    . Average headline CPI inflation projected for 2026 by the BOT Monetary Policy Committee. Thailand, BOT Monetary Policy Committee. Basis date: 28 Oct 2026. Source: Bank of Thailand: Monetary Policy Committee's Decision 5/2026 (2026-10-28)
  5. BOT headline inflation forecast for 2027 (October 2026): 1.3% (down from 1.4% in the June 2026 projection)
    June 2026 figures from MPC Decision 3/2026 (24 June 2026); the August 2026 decision gave no numeric forecasts.
    . Average headline CPI inflation projected for 2027 by the BOT Monetary Policy Committee. Thailand, BOT Monetary Policy Committee. Basis date: 28 Oct 2026. Source: Bank of Thailand: Monetary Policy Committee's Decision 5/2026 (2026-10-28)
  6. BOT core inflation forecast for 2026 (October 2026): 1.2% (down from 1.5% in the June 2026 projection)
    June 2026 figures from MPC Decision 3/2026 (24 June 2026); the August 2026 decision gave no numeric forecasts.
    . Average core CPI inflation projected for 2026 by the BOT Monetary Policy Committee. Thailand, BOT Monetary Policy Committee. Basis date: 28 Oct 2026. Source: Bank of Thailand: Monetary Policy Committee's Decision 5/2026 (2026-10-28)
  7. IMF real GDP growth projection, 2026 (WEO October 2026): 2.1% (against 2.4% in 2025). IMF projection of annual real GDP change for 2026, WEO October 2026, Table A4. Thailand, whole economy. Basis date: 13 Oct 2026. Source: IMF World Economic Outlook, October 2026: Online Statistical Appendix Tables A4 (real GDP) and A7 (consumer prices)
  8. ADB GDP growth forecast, 2026: 2.0% (raised from 1.8% (July 2026)). ADB ADO September 2026 real GDP growth forecast. Whole economy. Basis date: 23 Sep 2026. Source: ADB: Developing Southeast Asia, Asian Development Outlook September 2026 (2026-09-23)
  9. World Bank real GDP growth forecast, 2026: 2.0% (raised by 0.7 percentage points from the previous World Bank projection). World Bank East Asia and Pacific Economic Update, October 2026 forecast. Whole economy. Basis date: 6 Oct 2026. Source: VIR: World Bank raises Vietnam's 2026 GDP growth forecast to 7.4 per cent (2026-10-07)
  10. Bank of Thailand inflation target band: 1–3%. Monetary policy target range for headline inflation. Thailand. Basis date: 6 Oct 2026. Source: Business Recorder (Reuters): Thai September headline CPI rises 2.82% on year, below forecast (2026-10-06)
  11. Headline CPI inflation, September 2026: 2.82% (up from 2.53% in August). Year-on-year change in the headline consumer price index, Ministry of Commerce. Thailand, national. Basis date: 30 Sep 2026. Source: The Nation: Fuel and fresh food lift Thai September inflation to 2.82% as 2026 forecast narrows to 1.8–2.2% (2026-10-06)
  12. Large corporate loan growth, y/y: 6.6%
    Per BOT official.
    . Year-on-year growth of bank lending to large corporates. Large corporate lending. Basis date: 30 Jun 2026. Source: The Nation: New bad debts rise as high costs and weak demand strain Thai firms (2026-08-19)
  13. Bank SME loan growth, y/y: −4.6%
    Per BOT official.
    . Year-on-year change in bank lending to SMEs. SME lending, banks. Basis date: 30 Jun 2026. Source: The Nation: New bad debts rise as high costs and weak demand strain Thai firms (2026-08-19)
  14. Commercial bank loan growth, y/y: 2.0%. Year-on-year growth of commercial bank loans. Commercial banking system. Basis date: 30 Jun 2026. Source: Bank of Thailand: Banking Sector Quarterly Brief (Q2 2026) (2026-08-18)

Sources

  1. Bank of Thailand: Monetary Policy Committee's Decision 5/2026 (2026-10-28)primary
  2. Bank of Thailand: Monetary Policy Committee's Decision 3/2026 (2026-06-24)primary
  3. The Nation: Bank of Thailand holds policy rate at 1.00% on October 28 (2026-10-28)
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A Japanese version of this article is available: 日本語版

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