Thailand Inflation

Inflation decelerates in June

Latest reading: Consumer prices increased 2.4% on a year-on-year basis in June, following a 2.8% rise in the prior month and surprising markets on the downside. As such, inflation remained within Bank of Thailand (BOT)’s 1.0–3.0% target range. Relative to the previous month's figures, there were milder price pressures for transportation and communication (+8.8% in annual terms vs +11.1% in May) and recreation and education (+0.7% vs +0.8% in May). In contrast, there were higher price pressures for food and beverages (+1.0% vs +0.9% in May) and housing and utilities (+0.2% vs +0.1% in May). Meanwhile, core consumer prices were up 1.2% in annual terms in June, following a 0.9% rise in the prior month. Lastly, consumer prices fell 0.34% in June in month-on-month terms, following a 0.17% rise in the previous month.

Panelist insight: Nomura’s Euben Paracuelles and Lattakit Lapudomkarn commented: “We reiterate our forecast for headline inflation to remain low at 1.5% y-o-y for 2026, below the BOT’s 2.8%. We expect weak domestic demand to persist despite fiscal measures, which we assess will have low and temporary multipliers. Declining global crude oil prices will significantly reduce pressures on headline inflation in H2 2026. Importantly, we still no clear signs of second-round effects, as reflected in core-core inflation remaining below 1.0%. […] Our CPI inflation forecast remains within the BOT's 1-3% target and importantly, second-round effects remain limited. In addition, the Bank of Thailand maintained a neutral stance at its June meeting, signaling it would continue to look through supply-driven inflation and view it as temporary. This aligns with our view that the BOT will prioritize supporting weak demand over transitory price pressures.”

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