Thailand faces sustained negative consumer inflation

Prices remain under pressure

Thailand’s consumer price inflation has stayed in negative territory for an extended period, reflecting softer price pressures across the economy. According to official data, the consumer price index (CPI) fell year-on-year for consecutive months through the end of 2025, with a decline of around 0.28 % recorded in December. This marked nine straight months of falling consumer prices, keeping headline inflation well below the Bank of Thailand’s long-run target range of 1 %–3 %.

Supply-side influences dominate price movements

The persistent downtrend in headline inflation is largely driven by declines in energy costs such as electricity and fuel, which account for a meaningful share of the consumer price basket. Other categories including personal care items, clothing and household goods have also shown downward price trends amid strong market competition. At the same time, food and non-alcoholic beverage prices have risen, underlining a mixed picture with some upward pressures offsetting broader declines.

Policy response and economic context

Thailand’s monetary authorities are closely monitoring inflation dynamics, balancing the need to support economic activity with the objective of maintaining price stability. The extended period of low or negative headline inflation has given policymakers space to consider accommodative measures, including possible interest rate cuts, while emphasising that underlying core inflation excluding volatile items remains modestly positive.

Impact on households and markets

Extended negative inflation creates a nuanced impact on households and businesses. Lower headline prices can ease the cost of living for consumers, but they may also signal weak domestic demand, which can deter investment and slow economic momentum. For firms, ongoing price pressures challenge profitability and strategic planning.

Outlook and potential shift in trend

Analysts suggest that inflation may return to positive territory in early 2026 as tourist arrivals increase, agricultural prices rise, and domestic demand strengthens. However, global energy price movements, currency dynamics and external economic conditions will remain key influences on Thailand’s inflation trajectory.

As reported by experts at International Investment, the prolonged negative inflation trend in Thailand primarily reflects supply-side and external price pressures rather than a deep-seated deflationary cycle, highlighting the importance of targeted monetary and fiscal measures to support balanced economic growth and price stability.