According to data just released by Thailand’s Ministry of Commerce on October 7, the country’s consumer price index (CPI) in September 2025 continued to fall by 0.72% year-on-year, marking the sixth consecutive month of negative CPI growth.

This decline was lower than the average forecast in Bloomberg’s survey and also below the month-on-month decrease of 0.03%. The main reasons are believed to be government subsidies on energy, along with persistently low fuel and food prices.

Speaking at a press conference on October 7, Mr. Nantapong Chiralerspong, Director-General of the Trade Policy and Strategy Office under the Ministry of Commerce, said that Thailand's economy is facing a slowdown, but not entering a state of deflation as core inflation remains positive.

Data shows that, excluding items with highly volatile prices such as food and energy, Thailand’s core inflation in September rose by 0.65%, although still lower than experts’ expectations.

Possibility of a second consecutive interest rate cut

Analysts believe the downward inflation trend and weak economic outlook are creating favorable conditions for the Bank of Thailand to consider loosening monetary policy.

According to a Bloomberg survey, most experts predict that the Bank of Thailand will reduce its policy interest rate by another 0.25 percentage points to 1.25% at its upcoming monetary policy meeting scheduled for October 9. If approved, this would mark the second consecutive rate cut by the Bank of Thailand, and also the first decision under the new Governor Vitai Ratanakorn – who has repeatedly expressed support for growth-oriented monetary policies.

Government lowers full-year inflation forecast to 0%

Also at the October 7 press conference, the Ministry of Commerce announced a revision to its 2025 inflation forecast, lowering it to 0%, down from the previous projection of 0–1%.

According to Mr. Nantapong, this adjustment reflects the reality that economic growth in the first three quarters has fallen short of expectations, while consumer prices remain under pressure from government price stabilization policies. Additionally, the recent appreciation of the Thai baht has helped reduce energy and import costs, further easing inflation pressure.

Consumption stimulus policy unlikely to significantly affect prices

The Thai government, under the leadership of Prime Minister Anutin Charnvirakul, is planning to implement several consumption stimulus packages in the near future to support the economy. However, Mr. Nantapong stated that these measures would likely only create a short-term boost in domestic demand and would not significantly alter the inflation trend from now until the end of the year.

In the current context, the prolonged negative inflation rate is not causing serious concern among Thai authorities regarding the risk of deep deflation. However, it still poses a challenge for policymakers in balancing price stability with the goal of promoting economic growth.

Source: Compiled by the Multilateral Trade Policy Department, Ministry of Industry and Trade of Viet Nam