Thailand experienced a week of significant economic and policy developments, with the Central Bank’s decision to hold interest rates steady, a major stimulus package approval, and a controversial policy reversal on cannabis dominating headlines.

Thailand’s Central Bank Maintains Interest Rate at 1.75%

In a widely anticipated move, the Bank of Thailand kept its benchmark interest rate unchanged at 1.75% during its June 2025 policy meeting. The Monetary Policy Committee’s 6-1 vote to maintain the rate reflects cautious optimism amid subdued inflation and uncertain economic indicators. This stability provides flexibility in responding to potential volatility, especially considering the SET Index’s year-to-date drop of nearly 24%, now at its lowest since March 2020 due to ongoing political instability.

฿110 Billion Stimulus Plan Aims to Boost Economy

Thailand’s Economic Stimulus Board approved a substantial ฿110 billion package aimed at boosting GDP growth by approximately 0.4% to 0.5%. The package primarily targets infrastructure projects such as roads, flood prevention, and water management, alongside support for tourism and job creation. The funds are designed to mitigate external economic shocks and distribute benefits equitably across the country’s regions.

Pickup Truck Trade-In Program Proposed

Thailand is also exploring relief measures for its struggling automotive sector, including a trade-in scheme targeting 20–25-year-old pickup trucks. Proposed incentives include tax discounts to encourage new vehicle purchases, alongside debt relief and energy price stabilization measures to support consumer purchasing power.

Cannabis Policy U-Turn: Recreational Use Recriminalized

In a notable policy reversal, Thailand’s Health Ministry has recriminalized recreational cannabis use, limiting it exclusively to medical purposes as of June 25, 2025. Cannabis flowers are now classified as controlled substances, and cultivation and sales must adhere to stringent standards. This abrupt shift addresses rising concerns about youth access and the potential for illicit trade, signaling increased regulatory risks in what was previously a rapidly expanding market.

Three Virtual Banks Approved, Supporting Digital Growth

The Ministry of Finance and Bank of Thailand granted licenses for three new virtual banks, which must begin operations within a year. This marks a significant step forward in Thailand’s digital banking landscape, aligning with the country’s objectives for economic modernization and financial innovation.

Ongoing Trade Negotiations with the U.S.

Thailand submitted an initial trade proposal to the United States, addressing critical areas such as tariffs, digital trade, and non-tariff barriers. Discussions continue amid U.S. warnings of potential tariff hikes if no agreement is reached by July 9, highlighting the high stakes for Thailand’s trade relationships.

BCPG and NT Forge Renewable Data Center Venture

BCPG, a subsidiary of energy giant Bangchak, and the state-run telecom NT have established a joint venture to develop a renewable-powered data center. This initiative aims to meet growing demand from government and enterprise clients while supporting Thailand’s goals of sustainability and digital economy growth.

As Thailand navigates these multifaceted challenges and opportunities, strategic policy decisions will remain critical in shaping the country’s economic trajectory and business environment.