A price board at a PTT station on Nawamin Road in Bangkok shows diesel prices hitting an all-time high last month as the Middle East war drives up oil production costs. (Photo: Varuth Hirunyatheb)
Headline inflation rose in April, the first increase in a year, as domestic fuel prices surged amid ongoing geopolitical tensions and the prolonged blockade of the Strait of Hormuz, according to the Commerce Ministry.
The headline Consumer Price Index was 103.3, a 2.89% year-on-year increase and the highest gain since February 2023, said Nantapong Chiralerspong, director-general of the Trade Policy and Strategy Office (TPSO).
He said higher fuel prices have driven up public transport fares, including airfares and motorbike taxis, as well as prices of prepared food.
Only a few products, such as deodorant, facial cleansing foam and mangoes, recorded a price decline.
TPSO expects headline inflation in May to rise 3.06% year-on-year, attributed to high energy prices due to the war and rising prepared food prices as operators are pressured by increasing costs.
The increase in meat prices, especially pork and chicken, is driven by higher feed and logistics costs. Rising transport costs also contributed to the projection, noted TPSO.
However, the government’s cost-of-living relief efforts such as the “Thai Chuay Thai” initiative and electricity price restructuring could ease May inflation, said Mr Nantapong.
TPSO outlined two possible scenarios for 2026 headline inflation.
In the first scenario, diesel prices in April and May are forecast at 44.24 baht per litre, before declining to 32.35 baht for the remainder of the year.
Electricity prices are projected at 3.95 baht per unit from May to August, then declining to 3.88 baht per unit, while quick meal prices are projected to rise by 3%. Under this scenario, headline inflation is projected at 1.5-2.5%.
In another scenario, diesel prices from April to June are expected to remain at 44.24 baht per litre, then fall to 34 baht. Electricity prices are projected at 3.93 baht per unit from May to December, while quick meal prices are expected to increase by 6%. Under this scenario, headline inflation is projected at 2.5-3.5%.
The Commerce Ministry forecasts headline inflation of 1.5-2.5% this year, with a midpoint of 2%.