Thailand’s central bank lowered its policy rate to a near three-year low on Wednesday to boost a slowing economy grappling with U.S. tariffs, falling prices and weak foreign tourist arrivals, with further policy easing seen later this year.

As widely expected, the monetary committee unanimously cut the one-day repurchase rate by 25 basis points to 1.50 per cent, the lowest since late 2022. It was the fourth reduction in 10 months.

The economy was expected to expand this year and next, close to earlier assessments of 2.3 per cent and 1.7 per cent, respectively, but U.S. trade policies would exacerbate structural problems and weaken competitiveness, with small businesses especially vulnerable, the Bank of Thailand said.

“The committee views that monetary policy should be accommodative going forward to support the economy,” it said.

This year’s growth forecast has some upside from a surge in exports, assistant governor Sakkapop Panyanukul told.

Exports, a key growth driver, grew 15 per cent annually in first six months of 2025 as shippers raced to beat U.S. tariffs, but higher U.S. levies on most trading partners went into effect on August 7, with those on Thai imports set at 19 per cent.

The economy will slow in the second half, although there is little chance of a technical recession – or two consecutive quarterly contractions, Sakkapop added.

The central bank is ready to ease further if the economy faces severe shocks, he said.

“Weak economic growth remains the main reason for expecting more easing,” said Gareth Leather, senior Asia economist at Capital Economics, said in a note, predicting a further 50 basis-point cuts by the end of the year.

Southeast Asia’s second-largest economy also has struggled with weak consumption and high household debt, with analysts expecting rate reductions at reviews in October and December.