Thailand’s finance minister says wants to see higher inflation target even after cutting interest rates

Thailand: Following the central bank’s unexpected rate decrease the day before, Thailand’s finance minister said on Thursday that the country’s government still wants to see a higher inflation objective that would raise prices.

According to Pichai Chunhavajira, the rate cut on Wednesday will contribute to a boost in confidence and liquidity for reporters.

In response to repeated requests from the government to loosen policy in an effort to boost the second-largest economy in Southeast Asia, the central bank unexpectedly lowered its benchmark rate by 25 basis points to 2.25 percent, the first decrease since 2020.

According to Pichai, the central bank’s next rate decision should take into account the pattern of interest rates in other nations.

Though he intended to address the existing inflation goal of 1 to 3 percent with the central bank this month, Pichai said that a higher inflation target for 2025 would be preferable.

“A higher inflation target will help increase inflation because this year it’s clear that inflation has not reached the target yet,” he said.

He said, “We want to see inflation higher than now,” but he wasn’t sure whether inflation will reach its goal again in 2025.

In September, the annual headline inflation rate was a mere 0.61%.