Thailand experienced a sharp increase in its April Consumer Price Index (CPI), primarily attributed to energy costs and selective food price pass-through, rather than broad-based demand-led inflation, according to UOB economists Enrico Tanuwidjaja and Sathit Talaengsatya [1]. Despite the near-term upside risks from this cost-push shock, UOB maintains its headline CPI forecasts at 1.4% for 2026 and 1.2% for 2027, and expects the Bank of Thailand (BoT) to keep its policy rate unchanged at 1.00% through 2027 [1].
The Ministry of Commerce (MOC) has also kept its 2026 headline inflation forecast range at 1.5%–2.5%, with a midpoint of 2.0%, based on assumptions including Dubai crude at USD75–85 per barrel, USD/THB at 32.5–33.5, and GDP growth of 1.5%–2.5% [1]. The MOC anticipates that May inflation will remain positive, supported by factors such as domestic retail oil prices, prepared-food pass-through, higher pork and chicken prices, increased travel costs, and broader producer-cost pressures. These will be partially offset by cost-of-living measures, lower electricity charges compared to last year, and a slow recovery in fresh-fruit prices [1].
On April 29, the BoT's Monetary Policy Committee (MPC) unanimously voted 6–0 to maintain the policy rate at 1.00% [1]. The central bank now forecasts GDP growth of 1.5% in 2026 and 2.0% in 2027, headline CPI of 2.9% in 2026 and 1.5% in 2027, and core CPI of 1.6% and 1.5% for those years, respectively [1]. The BoT continues to view the current price increases as neither broad-based nor persistent, citing weak demand conditions and anchored medium-term inflation expectations [1].
UOB economists reiterate their expectation that the BoT will keep the policy rate unchanged at 1.00% through 2026 and 2027, unless supply-side inflation broadens into second-round effects such as wage increases, services price hikes, rising inflation expectations, or disorderly foreign exchange pass-through [1].
CONCLUSION
Thailand's recent inflation spike is seen as a supply-driven event, with both UOB and official authorities expecting the Bank of Thailand to maintain its policy rate at 1.00% through 2027. Market implications are moderate, as inflation is not expected to become broad-based or persistent under current economic conditions.