Thailand’s inflation stayed in negative territory for the sixth consecutive month in September, increasing expectations that the central bank will lower interest rates this week. The consumer price index dropped 0.72% from a year earlier and 0.03% from the previous month, reflecting continued weakness in domestic demand and lower energy and food prices.
Officials attributed the decline to government subsidies on fuel and energy, alongside reduced commodity prices. While authorities maintained that the economy is not facing deflation, they acknowledged that growth has slowed sharply in recent months. Core inflation, which excludes food and energy, rose only 0.65% in September — still below expectations.
The combination of weak price pressures and sluggish growth is likely to prompt the Bank of Thailand to cut its benchmark rate by 25 basis points to 1.25% in its upcoming meeting. The decision will be the first under new Governor Vitai Ratanakorn, who has signaled a preference for more accommodative policies to support the economy.
The Commerce Ministry has revised its inflation forecast for the year to 0%, citing subdued growth, easing import costs due to a stronger baht, and ongoing cost-of-living support from the government. Meanwhile, Prime Minister Anutin Charnvirakul’s administration is preparing new stimulus measures to encourage consumer spending, expected to provide only a modest short-term boost to demand.