Thailand's average consumer price index (CPI) increased by 0.4% in 2024 year-on-year, the lowest inflation in four years, according to the Commerce Ministry.
The increase was primarily driven by higher prices for food and beverages, especially ready-to-eat meals, fresh fruit and non-alcoholic beverages.
However, some prices decreased due to government support measures, such as electricity and diesel fuel.
For 2025, headline inflation is forecast to range between 0.3-1.3%, with a midpoint of 0.8%, attributed to the economic recovery, increased investment, growing consumption and the tourism boom, according to the ministry.
Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office (TPSO), said headline CPI increased by 1.23% year-on-year in December 2024, marking the ninth consecutive month of growth.
The key driving factor was higher fuel prices, resulting from a low base in 2023. The prices of food and beverage items also rose, notably from fresh fruit, food components and non-alcoholic beverages. Other goods and services did not have a significant impact on inflation.
The core CPI, which excludes food and energy prices, rose by 0.79% year-on-year in December.
Though the annual CPI was the lowest in four years, it aligned with the ministry's target inflation range of 0.2-0.8%, he said.
Inflation in January 2025 is expected to tally 1.25% year-on-year, with average inflation in the first quarter exceeding 1%, said Mr Poonpong.
In the second and third quarters, inflation is expected to dip below 1%, then rise to more than 1% in the final quarter, according to TPSO.
The inflation forecast for this year assumes Thai economic growth of 2.3-3.3% year-on-year and average Dubai crude prices of US$70-80 per barrel, with the local currency swinging between 34 and 35 baht per US dollar.
Other key factors include improvements in private investment and consumption alongside the booming tourism sector, which drives higher demand for goods and services.
However, three significant factors may temper inflation, said Mr Poonpong. First, the government is likely to continue implementing measures to ease living costs, particularly reductions of electricity and liquefied petroleum gas prices.
Second, the high base price of fresh fruit and vegetables in 2024, influenced by the El Niño and La Niña weather phenomena, is expected to be less severe in 2025, leading to minimal price impacts.
Third, a slowdown in the real estate and domestic automotive sectors may limit growth in housing rents and car prices.
He said several factors could pose risks to inflation, including protectionist trade measures, geopolitical tensions, and alterations in agricultural export policies from key producers such as rice and palm oil.
However, the planned minimum wage hike is not expected to affect inflation significantly, said Mr Poonpong.