Thailand's headline inflation eased for a second consecutive month in June, coming in at 2.4% year-on-year compared to 2.8% in May, and below the Bloomberg consensus of 2.7% [1]. This figure remains comfortably within the Bank of Thailand's (BoT) 1-3% target range, with year-to-date inflation averaging 1.1% [1]. The easing in inflation follows a period of negative readings from April 2025 to March 2026, with inflation picking up steadily since April [1].
Food prices held steady at 1% year-on-year, matching the pace in May, while non-food prices moderated to 3.3% from 4% previously. Energy prices also slowed to 13.7% year-on-year from 18.1% in the prior month, with expectations for further moderation, which should help contain overall inflation pressures [1]. Core inflation, excluding food and energy, was slightly higher at 1.2% year-on-year, just above the Bloomberg consensus of 1.1% and up from 0.9% previously [1].
The Ministry of Commerce maintained its 2026 inflation forecast at 1.5-2.5%, citing lower electricity tariffs and abundant meat supplies as factors that should help contain price pressures [1]. Commerzbank’s Charlie Lay noted that the USD/THB edged higher following the inflation data, reflecting expectations that the BoT will keep its policy rate on hold at 1% at least through the next meeting on 26 August, and possibly through year-end [1].
Key risks to the inflation outlook include a potential rebound in energy costs or higher food prices due to El Niño, but policymakers are likely to view the recent rise in inflation as manageable and the current policy setting as supportive of the economy [1].
CONCLUSION
Thailand's June inflation data supports expectations for the Bank of Thailand to maintain its policy rate at 1%, with inflation remaining within target and key price pressures moderating. The market reaction has been muted, with the Thai Baht trading near range highs against the US dollar, as policymakers see the current environment as manageable.