Thailand will retain its inflation target at a 1% to 3% band for 2026, according to statements from Bank of Thailand Governor Vitai Ratanakorn on Monday. The announcement comes as the country grapples with several consecutive months of negative headline inflation.
Speaking to the press, Vitai emphasized that the central bank is focused on returning inflation to positive levels as swiftly as possible and aims to circumvent a situation of deflation. Despite these efforts, the governor warned that headline inflation is unlikely to fall within the official target until 2027, citing persistent effects from oil price fluctuations.
According to Vitai, Thailand reported an eighth straight month of negative headline inflation in November. The central bank projects that the full-year rate will average -0.1% in 2025, before easing up to 0.3% in 2026.
The central bank’s inflation framework, established annually in consultation with the finance ministry, sets the course for monetary policy. Any changes to the target still require endorsement from the cabinet, the governor added.
Last week, the Bank of Thailand voted unanimously to reduce its key interest rate by 25 basis points on Wednesday, bringing the policy rate down to 1.25%. The central bank’s decision aligns with projections from numerous analysts and economists, who cited a sluggish macroeconomic backdrop as a primary driver for the cut.
