Photo Credit: Commerce Ministry
Thailand’s annual inflation remained negative for the second consecutive month in May, according to the Commerce Ministry, which also revised its full-year forecast down to near zero ahead of the upcoming monetary policy review by the central bank.
The consumer price index declined by 0.57% in May compared to the previous year, slightly less than the 0.80% drop predicted in a Reuters poll and following a 0.22% decrease in April. This marks the third consecutive month where inflation has fallen below the central bank’s target range of 1.0% to 3.0%.
Poonpong Naiyanapakorn, head of the ministry’s Trade Policy and Strategy Office, indicated that positive inflation could be expected in June, but the forecast of 0.2% to 0.4% remains below the central bank’s target.
The ministry lowered its full-year inflation projection to a range of 0.0% to 1.0%, down from the previous estimate of 0.3% to 1.3%.
Poonpong attributed the May decline to lower energy prices and increased agricultural output, such as vegetables. Meanwhile, the core Consumer Price Index—excluding volatile food and energy costs—rose by 1.09% year-over-year, surpassing the forecasted increase of 0.94%.
For the first five months of the year, headline inflation averaged 0.48%, with the core rate at 0.95%.
In April, the Bank of Thailand lowered its key interest rate by a quarter point to 1.75%, the lowest in two years, and also downgraded its growth and inflation forecasts for 2025 amid concerns over U.S. tariffs. The central bank’s next policy meeting is scheduled for June 25.
Deputy Governor Piti Disyatat told Reuters last month that the Bank was prepared to ease monetary policy further if necessary to support Thailand’s economy amid global trade tensions. He emphasized that low inflation did not indicate weak domestic demand or deflation.
