THE Cabinet today (Dec. 30) approved a monetary policy target setting headline inflation rate of 1-3 percent for 2026 as proposed by Finance Minister Ekniti Nitithanprapas, PPTVHD36 said.
Mr. Siripong Angkasakulkiat, the Prime Minister’s spokesperson, said the inflation rate in the coming period could be highly uncertain due to global economic growth and energy prices, as well as structural changes. Therefore, if the headline inflation rate moves outside the target range, it is deemed appropriate for the Monetary Policy Committee to urgently consider solutions and report the results to the Cabinet, as well as build public confidence.
The Bank of Thailand had on Dec. 17 forecast GDP growth will reach 1.5 percent in 2026 and 2.3 percent in 2027 compared to 2.2 percent in 2025 and 2.5 percent in 2024.
The Central Bank’s headline inflation forecast for 2026 was 0.3 percent and 1 percent in 2027 compared to -0.1 percent in 2025 and 0.4 percent in 2024. Core inflation is expected to reach 0.8 percent in 2026 and 1 percent in 2027 compared to 0.8 percent in 2025 and 0.6 percent in 2024.
Siripong said the aim is to gradually return headline inflation to the medium-term target of 1-3 percent in 2026, while preventing deflation, or persistent negative inflation, due to widespread price declines in goods and services. This inflation target is deemed appropriate, as it has proven effective in maintaining price stability in the past and offers sufficient flexibility to accommodate fluctuations from external and supply-side factors.
Southeast Asia’s second-largest economy grew 1.2 percent in the third quarter from a year earlier, its slowest pace in four years, according to a Reuters report published by CNA.
The economy, which has lagged regional peers since the pandemic, has struggled with multiple challenges this year, including US tariffs, high household debt, a surging baht, a border conflict with Cambodia and political uncertainty ahead of elections in early February.
The baht has risen by 9 percent against the dollar this year, the second-biggest gain amongst Asian currencies. The government has said the baht’s strength is hurting the economy by affecting the competitiveness of exports and tourism, and the BOT reiterated that it was taking action to contain its gains.
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Top and Front Page – Graphic image on rising inflation rate. Credit – PPTVHD36
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