Inflation rises slightly in December, driven by food and fuel

Thailand's headline inflation rate increased by 1.23 percentage points in December, marking the ninth consecutive month of positive inflation, according to a recent study from the Commerce Ministry released on Monday. 

The report noted that average inflation for the entire year of 2024 was 0.40%, falling within the government's target range of 0.2-0.8%.

The Trade Policy and Strategy Office (TPSO) confirmed that the Consumer Price Index reached 108.28, while core inflation, excluding fresh food and energy, increased by 0.79%.

Poonpong Nayanapakorn, TPSO director, said December's inflation was largely influenced by higher prices of food and non-alcoholic beverages, which rose by 1.28%. Notable increases were seen in fresh fruits, including rambutan, mango, durian and watermelon, as well as instant coffee, soft drinks, and cooking essentials such as coconut products and curry paste.

However, some food items saw price decreases, including fresh vegetables, chicken eggs, pork, and food-delivery services. The non-food sector experienced a 1.21% increase, primarily due to higher fuel costs, electricity bills, house rent, and transport fees.

Thailand maintained its position as one of the countries with lower inflation rates globally, ranking 19th out of 129 economic zones and second-lowest among eight ASEAN nations that released figures in November 2024.

For the entire year of 2024, Thailand's average inflation rate was 0.40%, falling within the Commerce Ministry’s target range of 0.2-0.8%. Looking ahead to 2025, the ministry forecasts inflation to range between 0.3 and 1.3%, with an average of 0.8%.

          The outlook for 2025 suggests:

• First quarter: Inflation expected to exceed 1%
• Second and third quarters: Likely to remain below 1%
• Fourth quarter: Projected to return to 1% or higher

          These projections are based on:

• Expected economic growth of 2.3-3.3%
• Dubai crude-oil prices averaging US$70-80 per barrel
• Exchange rate of 34-35 baht to the US dollar

Meanwhile, there are some factors restraining inflation. They include: 

• Government Support Measures: Continued government support measures to alleviate the cost of living are expected to mitigate inflationary pressures.
• Economic Slowdown: A potential slowdown in the real-estate and automotive sectors could limit increases in house rents and car prices.
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The ministry noted that while economic recovery and increased tourism may push prices higher, government cost-of-living support measures and a slowdown in the property sector could help moderate inflation. Officials will continue to monitor the situation and adjust forecasts as needed.