Thailand’s consumer price index (CPI) dropped for the eighth consecutive month in December, falling below the Bank of Thailand’s target range.
- The December CPI decrease was the lowest in 34 months, indicating a prolonged period of low inflation in the country.
- The forecast for 2024 suggests that Thailand’s inflation rate may continue to remain low, potentially even turning negative in January.
Thailand’s consumer price index (CPI) dropped 0.83% in December, marking the eighth consecutive month that it has fallen outside the Bank of Thailand’s target range. This decline is the lowest in 34 months and the third straight month of decline.
The core CPI was up 0.58% in December, slightly below the forecasted rise. Inflation for 2023 was at 1.23%, with a forecast for this year to be between -0.30% to 1.7%. The economy is still expanding, but there is a possibility of negative inflation in January.
The Bank of Thailand has maintained its inflation target of 1% to 3% for 2024.
The Cabinet in Thailand has approved the monetary policy target for 2024, which was agreed upon by the Monetary Policy Committee (MPC) and the Minister of Finance. The recent decline in inflation is attributed to lower energy and commodity prices, as well as decreased meat prices. However, the outlook for inflation remains uncertain due to various factors such as government policies and the El Niño phenomenon.
The agreed monetary policy target is to keep headline inflation within the range of 1-3 percent for the medium-term horizon and for 2024. The Ministry of Finance and the Bank of Thailand will work together to coordinate fiscal and monetary policies to support economic growth. Regular discussions and reports will be conducted to monitor and achieve the monetary policy target. If headline inflation deviates from the target range, the MPC will issue an open letter to the Minister of Finance explaining the reasons and outlining necessary actions. The monetary policy target may be revised if necessary.
