Bank of Thailand defends inflation target

Thailand’s current inflation target range of 1% to 3% has “served pretty well” and should not be changed, a deputy central bank governor said on Thursday, as the government pushes for a higher price target to boost economic activity.
Inflation is low and well anchored, and there is no risk of deflation, while the economy is converging to trend growth, Piti Disyatat said in an interview.
He said he was hoping for a constructive discussion on the inflation target for 2025 when representatives from the Bank of Thailand and the Ministry of Finance meet next Tuesday.
“Hopefully, we have a good, constructive discussion and we will agree,” he said.
“We don’t see any clear reasons right now to really change it,” he said of the target.
Mr Piti reiterated that last week’s surprise interest rate cut was a recalibration, not the start of an easing cycle.
Governor Sethaput Suthiwartnarueput also signalled on Wednesday that another rate cut at the final policy meeting of the year on Dec 18 was very unlikely.
The central bank is aiming for a neutral stance, and policy could be adjusted if the macroeconomic picture changes significantly, Mr Piti said.