Consumer prices, which gauge headline inflation, rose to a five-month high in December, raising the full-year rate to 0.71% in 2019.
The Commerce Ministry on Thursday said overall consumer prices rose by 0.87% year-on-year in December, quickening from 0.21% in November, 0.11% in October, 0.32% in September and 0.52% in August.
The rise stemmed largely from an increase of 1.7% in food and non-alcoholic beverage prices, primarily for rice, flour and flour products, which surged by 8.8% from the same month last year.
Moreover, the prices of meats, poultry and fish increased 2.2%, owing to higher demand for year-end celebrations and stricter control measures for African swine fever, while eggs and dairy products (chicken eggs, milk, yoghurt drinks) saw a rise of 2.3% in price last month.
Prices of non-alcoholic beverages (carbonated drinks, sugary drinks, chocolate drinks) increased 1.9%, primarily because of the higher tax on sugary drinks since October.
Of the 422 product and service items used to gauge inflation, the prices of 25 items (including milled rice, pork, fresh fruits, detergent and electricity fees) rose last month. No price changes were registered for 189 items, while 108, including oranges, chillies and kale, saw prices drop.
On a month-to-month basis, consumer prices rose 0.01% from November.
"Inflation averaged 0.71% in 2019, in line with the Commerce Ministry's forecast of 0.7-1%," said Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office.
Core CPI, which excludes raw food and energy prices, rose 0.49% year-on-year and 0.03% month-to-month in December. For the whole year, core inflation averaged 0.5%.
Ms Pimchanok said the ministry forecasts headline inflation between 0.4% and 1.2%, with an average of 0.8%, for 2020.
The forecast assumes GDP growth of 2.7-3.7%, with crude oil prices averaging US$58-68 a barrel and an exchange rate of 30-32 baht per US dollar.
"The office is keeping a close watch on factors that may impact inflation rates in 2020, especially the drought that may affect prices of fresh food such as vegetables and rice," Ms Pimchanok said.
Thanavath Phonvichai, newly appointed president of the University of the Thai Chamber of Commerce, said the higher inflation rate in December reflects that the economy is recovering and consumer sentiment has improved, driven by tourism and the New Year festivities.
"The economy is recovering thanks to the government's massive spending plans in 2020 and the easing trade war," Mr Thanavath said. "We still need to wait and observe the situation over the next few months, and the government still needs to provide more stimulus packages to keep up growth momentum."