Finance Ministry still wants higher inflation target after rate cut

The government still wants to see a higher inflation target that will push up prices, Finance Minister Pichai Chunhavajira said on Thursday after the Bank of Thailand’s (BoT) surprise interest rate cut a day earlier.
Mr Pichai told reporters that Wednesday’s rate reduction will help increase liquidity and confidence.
The BoT unexpectedly cut its key rate by 25 basis points to 2.25%, the first reduction since 2020, following repeated calls by the government to ease policy to help revive Southeast Asia’s second-largest economy.
The central bank should consider the trend of interest rates in other countries when next deciding rates, Mr Pichai said.
However, he said a higher inflation target for 2025 would be desirable as he planned to discuss the current inflation target of 1% to 3% with the central bank this month.
“A higher inflation target will help increase inflation because this year it’s clear that inflation has not reached the target yet,” the minister said.
“We want to see inflation higher than now,” he said, adding it was uncertain that inflation would return to target in 2025.
Annual headline inflation was just 0.61% in September.