Inflation continued to ease for a sixth straight month in November, hitting a five-year low, due mainly to lower retail fuel prices and government measures aimed at alleviating the cost of living.
The Commerce Ministry yesterday reported headline inflation, which is based on 450 items, dropped to a 61-month low of 1.26% year-on-year.
In October, the rate was 1.48% after readings of 1.75% in September, 2.09% in August, 2.16% in July, 2.35% in June and 2.62% in May.
Core inflation, which excludes volatile food and energy prices, was 1.6% in November, easing from October's 1.67%.
For the first 11 months, inflation rose by 2.02% year-on-year, with core inflation up 1.57% and within the Bank of Thailand's target range of 0.5% to 3%.
Deputy commerce permanent secretary Amparwon Pichalai said consumer prices had risen at a slower rate due to falling retail fuel prices, in line with declines in the global crude oil price.
Despite inflation easing for a sixth consecutive month, the ministry remains confident this will not lead to deflation, in which prices of goods and services have fallen for six months in a row, she said.
Mrs Amparwon insisted inflation remained in a positive range, with only the rate of increase easing.
"Inflation is expected to be about 1.6% in the fourth quarter, leading to a rate of about 1.8% for the second half and 2% for the whole year," she said.
"This is due mainly to Thailand's energy restructuring and the government's cost-of-living control measures reducing inflationary pressure."
Mrs Amparwon said the government's recently approved plan to stimulate consumer spending and the Commerce Ministry's campaign to cut prices at retail outlets from Dec 24-30 were unlikely to affect consumer prices much.
Given falling oil prices, inflation is also unlikely to increase significantly in next year's first quarter, she said.
The Commerce Ministry is maintaining its 2014 inflation forecast within a range of 2% to 2.8% while projecting inflation of 1.8% to 2.5% next year.
Credit Suisse economist Santitarn Sathirathai said with headline inflation likely to average close to the bottom end of the Bank of Thailand's inflation target and growth remaining weak, the company was maintaining its view that the central bank would soon opt to cut its policy rate to boost private sector confidence.
"We think the window of opportunity for the rate move will be within the next three months," he said. "While we see a chance of the Bank of Thailand cutting the rate by 25 basis points to 1.75% as early as its Dec 17 meeting, we believe it may opt to see more high-frequency growth and inflation data before acting."