Thailand Inflation Update

BANGKOK (Reuters) – Thailand’s inflation rate has returned to the target range for the first time since May last year, driven by higher energy and food prices, according to the commerce ministry on Monday.

The Thai headline consumer price index rose 1.23% in December from a year earlier, falling within the central bank’s target of 1% to 3%, following last month’s increase of 0.95%.

This figure contrasts with a forecasted rise of 1.47% in a Reuters poll.

The core CPI increased by 0.79% in December compared to the previous year, slightly under the projected increase of 0.81%.

For 2024, the average annual headline inflation is expected to be 0.40%, while core inflation is predicted at 0.56%.

In January, headline inflation is anticipated to be around 1.25% and above 1% in the initial quarter of this year, stated Poonpong Naiyanapakorn, director of the ministry’s trade policy and strategy office, during a press conference.

The ministry has kept its headline inflation forecast for 2025 at a range of 0.3% to 1.3%, bolstered by expected stronger economic growth and government stimulus measures.

Previously, Finance Minister Pichai Chunhavajira mentioned that the Bank of Thailand needs to bring inflation to the midpoint of the target range while ensuring the baht’s competitiveness.

On December 18, the central bank maintained its key interest rate at 2.25%, following an unexpected cut in the previous review in October. It had projected a 1.1% inflation rate for 2025, with the next rate review scheduled for February 26.