Thai government pushes for higher inflation target at BOT meeting

BANGKOK (Reuters) -Thailand’s inflation target should work to lift inflation above 1%, the finance minister said on Tuesday, before a meeting with the central bank where he hoped to be able to reach an agreement on a new target and whether it should be a midpoint or range.

Finance Minister Pichai Chunhavajira and Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, along with officials, are meeting to discuss the inflation target.

The government has pushed for a higher inflation goal from the current 1% to 3% range to spur a sluggish economy, while the central bank has insisted the target, which has been in place since 2020, has worked well for the economy.

Ahead of the meeting, Pichai said inflation would miss the target this year, as average annual headline inflation was just 0.20% in the first nine months of 2024.

“Inflation that is less than 1% is really too low,” he said, adding he hoped the matter would concluded soon.

“If it is not finished today, at least there must be a guideline,” he added.

Earlier this month, the BOT unexpectedly cut its key interest rate by 25 basis points to 2.25%, the first reduction since 2020 in October.

The government had been pressing all year for a cut, saying interest rates had stymied activity. The central bank had responded that structural issues were weighing on growth.