The Finance Ministry wants an inflation framework that can better drive the economy forward, according to Deputy Finance Minister Paopoom Rojanasakul.
Mr Paopoom questioned whether the current inflation target set by the Bank of Thailand at 1-3% should be revised to a more appropriate range.
He said the government is reluctant to see inflation rates dip too low, as inflation at the lower end of the range (1%) would be too small and might be insufficient to stimulate the economy.
"If inflation stays at plus or minus 1%, it would likely characterise an economy that is quite stagnant," said Mr Paopoom.
He said the ministry would like the inflation target to be set as a median rate rather than as a range. Using the current scenario as an example, a median target of 2%, plus or minus 0.5%, could be set instead.
Mr Paopoom said low inflation rates require the government to implement monetary and fiscal policies to stimulate economic circulation, such as the low-interest credit scheme offered by the Government Savings Bank, amounting to 100 billion baht in total, and the credit guarantee fund tallying 50 billion baht through the state-owned Thai Credit Guarantee Corporation.
The government also rolled out tax measures to support tourism in secondary cities. Some analysts estimate that without such policies, inflation rates would have dropped to 0.3-0.4%, he said.
In the past, when the inflation rate surpassed the target range, the central bank simply reported it to the government for its review.
Mr Paopoom stressed the need for a stronger framework to handle inflation targets, which should include heightened accountability for those responsible for setting the targets.
This would not likely result in a penalty should the rate of inflation exceed the target range, but there should be stricter supervisory measures in place, he said.
The central bank predicted headline inflation of 0.6% this year and 1.3% in 2025, with core inflation forecast at 0.5% and 0.9% for 2024 and 2025, respectively.
Inflation rates are expected to increase as the effects of domestic diesel price subsidies and the excess supply of certain raw food items eases, according to the regulator.
Headline inflation is anticipated to gradually return to the central bank's target range by the fourth quarter of 2024, with medium-term inflation expectations aligned with the target, according to the central bank.
Piti Disyatat, secretary of the central bank's Monetary Policy Committee, recently said the Thai policy rate is not excessively high given the local economic context and comparisons to the policy rates of other central banks, including the US Federal Reserve, the European Central Bank and regional central banks, which are around 4-5%.