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Thailand’s annual headline inflation rate stayed in negative territory for the tenth consecutive month in January, underscoring continued price pressures driven largely by lower energy costs and government measures aimed at easing the cost of living. According to the Ministry of Commerce, the headline consumer price index (CPI) declined by 0.66% year-on-year in January, deepening from a 0.28% annual fall recorded in December.
The January inflation figure came in weaker than market expectations, as a Reuters poll had forecast a smaller decline of 0.40%. The outcome also remained well below the Bank of Thailand’s official inflation target range of 1% to 3%, highlighting the ongoing challenge of reviving price growth in Southeast Asia’s second-largest economy.
Officials attributed the prolonged period of negative inflation primarily to falling energy prices, particularly fuel and electricity, as well as state-led initiatives designed to reduce household expenses. These measures include subsidies and price controls that have helped shield consumers from higher living costs but have also contributed to suppressed headline inflation readings.
The Commerce Ministry said headline inflation is expected to remain negative in February and March before returning to positive territory in April, assuming energy prices stabilize and base effects begin to fade. This outlook suggests that deflationary pressures may be nearing an end, though risks remain tied to global energy markets and domestic demand conditions.
In contrast to the headline figure, Thailand’s core inflation rate, which excludes volatile items such as energy and fresh food, showed modest growth. Core CPI rose 0.60% in January compared with a year earlier, indicating underlying price pressures remain positive, albeit subdued.
The divergence between headline and core inflation reflects the significant impact of energy prices on overall inflation trends. Policymakers and investors will continue to closely monitor inflation data in the coming months, as it plays a key role in shaping monetary policy expectations and broader economic outlook for Thailand in 2024.
