Deflation in Thailand Deepens, Adding Pressure for Rate Cuts

Deflation in Thailand extended for an eighth consecutive month in November, intensifying pressure on the central bank to deliver another interest rate cut amid mounting economic challenges.

Data from the Commerce Ministry showed the consumer price index fell 0.49% year on year, underscoring a prolonged period of deflation driven by weak domestic demand.

The reading was milder than economists’ median estimate of a 0.6% decline, yet it confirmed the persistence of deflation and its drag on economic momentum.

Monetary Policy Outlook

The situation is compounded by severe floods that disrupted economic activity, adding urgency to calls for policy support.

Analysts say sustained deflation could prompt the central bank to cut its policy rate for a fourth time this year to stimulate consumption and investment.