Thailand’s consumer price index (CPI) extended its decline in August, the fifth consecutive month in the negative territory, highlighting persistent disinflationary pressures that are keeping headline inflation well below the central bank’s target range.
The commerce ministry reported on Thursday that headline CPI slipped 0.79% year-on-year, a deeper slide compared to July’s 0.7% decrease and slightly worse than the 0.7% drop projected by economists polled by Reuters.
The latest reading underscores an ongoing trend of subdued price growth, with headline inflation remaining outside the Bank of Thailand’s preferred 1% to 3% band.
Core inflation, which excludes often-volatile food and energy components, offered more stability with a 0.81% annual increase in August, suggesting that underlying price pressures are still present but remain muted.
The Commerce Ministry provided a cautious outlook, forecasting that headline CPI will post an average year-on-year contraction of 0.66% in the third quarter, before moderating to a smaller decline of 0.24% in the final quarter. Officials also warned that negative headline inflation may persist for the entirety of 2025.
The ongoing softness in consumer prices could bolster calls for the Bank of Thailand to maintain a dovish monetary policy stance, as the country continues to grapple with weak domestic demand and external uncertainties. Last month, the committee voted unanimously to cut the policy rate by 0.25 percentage point from 1.75 to 1.50 percent as U.S. trade headwinds weighed on economic growth.
