• Thailand’s headline inflation rate for March 2025 slowed to 0.84% YoY, while the core inflation rate decelerated to 0.86% YoY. The contributing factors are as follows:
- Domestic energy prices decreased, compared to those reported for March 2024, with electricity prices dropping by THB0.03/unit. The government has also extended its electricity subsidy program for vulnerable groups through April 2025. Meanwhile, gasohol prices declined in line with global crude oil prices, while the cost of LPG (liquefied petroleum gas) remained unchanged.
- Prices of several agricultural products, such as chicken, eggs, and fresh vegetables, decreased due to a high base effect from the same period last year. Additionally, this year’s weather conditions have become more favorable for cultivation.
• KResearch has lowered Thailand’s 2025 inflation forecast from 0.7% to 0.5%, as inflation may slow to less than 1% during the rest of this year.
• US tariff hikes may lead to a slowdown in Thailand’s purchasing power, in line with economic deceleration, further dampening domestic production and employment, and pressuring core inflation-related consumer spending.
• The government may further reduce domestic energy prices to ease the high cost of living. Meanwhile, global crude oil prices are expected to stabilize at USD70/barrel – below last year’s average – amid weakening global demand, though geopolitical risks may still cause volatility.
• Low-cost Chinese goods may capture a larger market share in Thailand as the renewed trade war intensifies, weighing on prices across multiple product categories, including fruits, vegetables, foods, electrical appliances, and miscellaneous goods. The pressure may lead to price reductions on such products.
• Supporting factors such as foreign tourists’ spending may decrease, particularly among Chinese visitors, whose numbers may fall short of expectations. The reduction may stem from intensified global competition for tourists, a slowing world economy, and concerns over the March 28 earthquake.
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