The Bank of Thailand raised its key interest rate by 25 basis points for a fifth consecutive meeting on Wednesday, as it attempts to bring inflation back within target as the economic recovery gathers steam.

The central bank’s Monetary Policy Committee voted unanimously to raise the one-day repurchase rate to 1.75%, as widely expected. The rate has been increased by a total of 125 basis points since August.

Of the 22 economists polled by Reuters, 18 had expected the BoT to raise the key rate by a quarter point while the remaining four had forecast no change.

Headline inflation, gauged by the Consumer Price Index, was 3.8% year-on-year in February, declining for a second straight month and the lowest rate in 13 months. This followed 5% inflation in January and 5.9% in December.

A rebound in tourism is boosting activity and demand in the economy. Campaign spending for the May 14 general election is also seen as fanning price pressures.

The central bank has cut its headline inflation forecast for 2023 to 2.9% from 3.0%, and expects it to return to within the target range of 1-3% in the middle of this year.

It currently projects economic growth of 3.6% this year and 3.8% next year, compared with previous forecasts of 3.7% and 3.9%, respectively.

It said persistently high inflation remained a risk and the baht was highly volatile as global economic uncertainty had increased. However, the country’s financial systems were resilient, it added.

“The committee thus decided to increase the policy interest rate to normalise the monetary policy stance in a gradual and measured manner toward a level consistent with long-term sustainable growth,” the BoT said in a statement.

“Financial fragilities nonetheless remain for some SMEs and certain households exposed to rising living costs and higher debt burden. The Committee agrees that financial institutions should continue to press ahead with debt restructuring and deems it important to have in place targeted measures and sustainable debt resolution for vulnerable groups.”

The statement said the committee was ready to adjust the size and timing of future rate moves should the growth and inflation outlook shift.