Thailand’s inflation unexpectedly eases, remains in target range

[BANGKOK] Thailand’s inflation unexpectedly slowed in May, staying within the central bank’s target range and reducing pressure for an interest-rate response.

The consumer price index rose 2.79 per cent in May from a year earlier, decelerating from 2.89 per cent in April, Commerce Ministry data showed on Friday (Jun 5). The May reading was below the 3.1 per cent median estimate in a Bloomberg survey of economists.

While April and May rates marked a sharp turnaround from the prolonged period of falling prices that persisted through much of 2025 and early 2026, inflation remains within the Bank of Thailand’s 1 to 3 per cent target range. Still, Commerce Ministry officials expect inflation to breach the bank’s target in the second half of this year.

The Bank of Thailand has consistently argued that the increase in prices is temporary and has signalled a willingness to look through any near-term inflation spike, saying tighter monetary policy would do little to address a supply-driven shock. Governor Vitai Ratanakorn said this week that the current policy rate remains “appropriate for now”.

The central bank left its benchmark one-day repurchase rate unchanged at 1 per cent in April, among the lowest policy rates globally. The next monetary policy meeting is scheduled for Jun 24.

Lower prices for fuel, transportation, meat, vegetables, eggs and dairy products compared with a month earlier helped ease inflation in May. Nantapong Chiralerspong, director-general of the Trade Policy and Strategy Office, said on Friday that weak consumer confidence also weighed on spending.

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On a month-on-month basis, the price index rose 0.17 per cent in May, compared with 2.75 per cent in April. Core inflation edged up 0.92 per cent, versus 0.83 per cent in April.

The ministry expects inflation to reach 3 per cent in June and remain above the 3 per cent mark throughout the second half of the year. BLOOMBERG