Thailand’s 2024 inflation forecast set between 0.2% and 0.8%
The Commerce Ministry has forecasted that Thailand’s headline inflation for 2024 will range from 0.2% to 0.8%, settling at a midpoint of 0.5%. This projection is part of a broader economic outlook that anticipates a range of factors influencing price changes in the coming years.
In 2025, headline inflation is expected to be slightly higher, between 0.3% and 1.3%, driven by economic improvements and rising diesel prices. Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office (TPSO), highlighted three primary factors contributing to this projection.
Firstly, Thailand’s economy is expected to strengthen in 2025, fueled by growth in both private investment and consumption. The increase in tourist arrivals is anticipated to boost demand for goods and services.
Secondly, the 33 baht (US$1) per litre diesel price ceiling is higher than the average for the first half of 2024, indicating upward pressure on fuel costs.
Lastly, public spending is projected to rise, partly due to the 10,000 baht (US$292) digital wallet initiative.
However, certain factors could help moderate inflation. Government measures aimed at lowering living costs, such as reducing electricity and liquefied petroleum gas prices, are expected to play a role.
Thailand inflation
The TPSO noted that the elevated base price of fresh fruit and vegetables in 2024 was influenced by the El Niño and La Niña phenomena. The weather in 2025 is anticipated to be less severe, minimizing its impact on prices.
A potential slowdown in the real estate and domestic automotive sectors could limit growth in housing rents and car prices, according to the office.
Modest price increases for essential goods are expected due to a downward trend in key cost factors such as interest rates and global oil prices.
Poonpong mentioned that if economic circumstances change, the headline inflation forecast will be reassessed.
In November, the ministry reported the consumer price index (CPI) was 108.5, up from 107.5 year-on-year, with headline inflation rising by 0.95%. This was primarily due to higher diesel prices, following a low base price from the previous year. Food and beverage prices also saw notable increases, particularly in fresh fruit, food components, and non-alcoholic beverages.
Other goods and services had a negligible impact on inflation.
The average CPI for the first 11 months increased by 0.32% compared to the previous year.
Core inflation, excluding fresh food and energy, rose by 0.8% year-on-year, up from 0.77% in October. The average for the first 11 months was 0.55%.
Poonpong indicated that December’s inflation rate is expected to rise between 1.2% and 1.3%, due to a surge in diesel prices, especially in the southern region, coupled with a decrease in fresh vegetable supply because of flooding, reported Bangkok Post.
As a result, consumers remain cautious with their spending, focusing primarily on essential items, as the economy has not yet fully recovered.
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