PATTAYA, Thailand – Thailand’s Finance Ministry and the Bank of Thailand have reaffirmed their commitment to a medium-term monetary policy framework targeting headline inflation within a range of 1–3 percent, as part of coordinated efforts to support sustainable economic growth.
Vinij Visetsuwannaphum, Director-General of the Fiscal Policy Office and spokesperson for the Finance Ministry, said the Cabinet has approved the medium-term monetary policy target and the target for 2026. The framework represents a joint agreement between the Monetary Policy Committee (MPC) and the finance minister, in line with Section 28/8 of the Bank of Thailand Act.
Under the agreement, headline inflation of 1–3 percent will remain the medium-term target, with policy in 2026 focused on gradually steering inflation back into the target range while preventing deflation or a prolonged period of negative inflation driven by broad-based declines in goods and service prices.
The ministry said the inflation target has proven appropriate in maintaining price stability in the past, helping anchor medium-term inflation expectations while remaining flexible enough to absorb volatility from external factors and supply-side shocks.
The Finance Ministry and the Bank of Thailand will continue to coordinate fiscal and monetary policy to support economic growth in line with Thailand’s potential and to guide inflation back toward target levels. Monetary policy will focus on maintaining price stability alongside sustainable economic expansion and financial system stability under the flexible inflation targeting framework.
Authorities said policy tools will include a combination of the policy interest rate and targeted financial measures to address household debt and support new lending, strengthening the transmission of monetary policy to the real economy.
On monitoring and accountability, the MPC will issue an open letter to the finance minister if headline inflation, based on a 12-month average or 12-month forward projection, moves outside the medium-term target range. If inflation remains outside the target, the MPC will provide updates every six months.
Should inflation continue to deviate from the target, the Finance Ministry, the Budget Bureau, the National Economic and Social Development Council, and the Bank of Thailand will hold joint discussions to determine appropriate corrective measures, with progress reports submitted to the Cabinet on a quarterly basis, according to a Cabinet resolution dated Dec 30. (TNA)
