Keep an Eye on Falling Inflation: Annual Target Now Only 1%

The Office of Trade Policy and Strategy (TPSO) has released Thailand’s latest general inflation data for May 2025, showing a year-on-year decrease of 0.57%. As a result, the Ministry of Commerce has revised its annual inflation forecast downward to a range of 0.0–1.0%. This marks the lowest inflation rate in ASEAN and the 7th lowest globally among 133 reported economies.

Mr. Poonpong Naiyanapakorn, Director of the TPSO, revealed that the Consumer Price Index (CPI) for May stood at 100.40, down from 100.98 in the same period last year. Key factors driving the decline in inflation include:

A drop in prices of fresh food, especially vegetables and fruits, due to favorable weather conditions boosting supply.
Lower global energy prices, which have reduced domestic retail prices for electricity, gasohol, and gasoline.

Although prices of some goods and services remained stable or slightly increased, they had minimal impact on the overall inflation picture.

Looking ahead to June 2025, TPSO expects inflation to remain low, supported by four main factors:

A clear year-on-year decline in global crude oil prices, leading to lower domestic energy costs.
Government measures to reduce the cost of living, such as a further 17 satang/kWh cut in the electricity fuel tariff (Ft) for May, bringing it down to 3.98 baht per unit.
Increased vegetable production due to better weather, compared to last year’s natural disasters, contributing to lower vegetable prices.
Economic and marketing stimulus campaigns by major businesses, aligning with government initiatives.

However, some products—such as coconuts, coffee, table salt, cooking oil, and pork—are expected to be more expensive than last year. Still, these increases are not significant enough to raise inflation concerns.

As a result, the Ministry of Commerce has revised its 2025 general inflation forecast from the previous range of 0.3–1.3% (midpoint 0.8%) to 0.0–1.0% (midpoint 0.5%). The ministry stated that this adjustment aligns with the current economic situation and actual market prices. They also emphasized that if there are any significant future changes, the forecast will be reviewed and adjusted accordingly.