BANGKOK, Thailand – Thailand’s headline inflation is expected to remain close to 4% through the fourth quarter of 2026 and the first quarter of 2027, driven mainly by higher energy and fresh food prices, before easing significantly during the remainder of next year, the Bank of Thailand (BOT) said.
Don Nakornthab, Assistant Governor of the BOT’s Monetary Policy Group, said October inflation figures were broadly in line with the central bank’s assessment presented at last week’s Monetary Policy Committee (MPC) meeting.
The MPC expects supply-side pressures from energy and fresh food prices to keep inflation elevated in the coming months, but considers the risk of persistently high inflation to be limited. It therefore voted to maintain the policy interest rate to support Thailand’s economic recovery. However, the committee will continue monitoring risks that inflation could exceed forecasts, particularly uncertainties surrounding the Middle East conflict, limitations on government energy price support measures, and the extent to which businesses pass higher costs on to consumers. Medium-term inflation expectations will also remain under review.
Don also discussed the impact of the US election on global energy markets. Market expectations that Washington could face greater pressure to seek an end to the conflict with Iran contributed to a sharp decline in crude oil prices. Brent crude fell from US$105.20 per barrel on November 3 to US$96.20 on November 4, a decline of more than 8%. However, uncertainty surrounding President Donald Trump’s next moves remains, with the possibility of further military escalation still a concern.
For Thailand, falling global oil prices may not translate immediately into lower domestic fuel prices, as money must gradually be collected to help offset the Oil Fuel Fund’s accumulated deficit. The overall impact on inflation will also depend on how businesses pass changes in production and operating costs on to prices of goods and services.
