The Bank of Thailand lowered its benchmark interest rate by 25 basis points to 1.25% at its December 2025 policy meeting, as widely expected. The central bank has cut its key rate five times over the past year, for a total reduction of 125 basis points, to support a sluggish economy grappling with US tariffs, high household debt, and a strong baht. The move brings the rate to its lowest level since December 2022. On the economic outlook, the BoT expects GDP to grow by 2.2% and 1.5% in 2025 and 2026, respectively. Headline inflation is revised down from previous projections to be at -0.1, 0.3, and 1.0% in 2025, 2026, and 2027, respectively. Headline inflation is expected to gradually return to the target range in the first half of 2027. Meanwhile, core inflation is expected to remain stable at 0.8%, 0.8%, and 1.0% in 2025, 2026, and 2027, respectively. The MPC reaffirms its readiness to adjust monetary policy as appropriate in line with evolving economic and inflation outlook.