Prices of prepared food are expected to increase as certain ingredients and vegetable prices rise, according to the Trade Policy and Strategy Office (TPSO).
The headline consumer price index (CPI) rose 1.95% in July year-on-year, following a 2.42% uptick in June.
Nantapong Chiralerspong, director-general of the TPSO, attributed the increase to elevated domestic fuel prices as prolonged tensions in the Middle East continued to affect global energy markets. Higher fuel costs also pushed up public transport fares.
In addition, prices of prepared food rose broadly at a relatively strong pace and are anticipated to continue rising as the prices of certain ingredients have gradually risen.
Fresh vegetable prices also increased from a year earlier, partly due to a low comparison base last year and the effects of El Niño.
Headline inflation is projected to be positive in August, driven by domestic retail fuel prices exceeding last year’s levels. Prepared food prices are also expected to rise as restaurants pass on higher ingredient costs to consumers.
Transportation expenses, particularly bus fares, are increasing in line with elevated fuel prices. Prices of key fresh vegetables are likely to be above last year’s levels.
However, several factors are helping to moderate inflation. Electricity fees for May-August are slightly lower compared to the same period last year, and fresh fruit prices are expected to decline as market supply increases.
Mr Nantapong said the probability of stagflation is low and is on a downward trend, citing the continued recovery in private consumption and business confidence, strong exports, sustained investment inflows and the low unemployment rate.
The Commerce Ministry maintained its 2026 headline inflation forecast at 1.5-2.5%. Inflation is projected to average 2.09% in the third quarter and rise to 2.33% in the fourth quarter.
The TPSO reported the consumer confidence index rose to 51.1 in July, remaining in positive territory for the second consecutive month.
He attributed the improvement to stimulus measures, particularly the “Thai Chuay Thai Plus” co-payment scheme, sustained export growth, and tourism recovery.
However, consumers expressed concerns about the high cost of living, household debt and uncertainties in the global economic and trade landscape.