Decline in consumer prices softens in November

Latest reading: Consumer prices were down 0.5% in annual terms in November, following a 0.8% fall in the prior month. Relative to the previous month's data, there were higher price pressures for food and beverages (+0.5% on a year-on-year basis vs -0.2% in October) and housing and utilities (-0.3% vs -0.4% in October). In contrast, price pressures reduced for transportation and communication in November (-2.6% vs -2.4% in October). Finally, the change in recreation and education prices was the same as in the prior month (+0.7% in November and October). Meanwhile, core consumer prices increased 0.7% on a year-on-year basis in November, following a 0.6% rise in the prior month. Lastly, consumer prices increased 0.15% in November on a month-on-month basis, following a 0.11% fall in the previous month.

Panelist insight: Nomura’s Charnon Boonnuch and Euben Paracuelles said: “We maintain our forecast for deflation to persist into 2026, pencilling in an average reading of -0.2%, which is unchanged from our 2025 estimate of -0.2% and is well below the BOT’s forecast of 0.5%. This suggests inflation will likely again undershoot the BOT’s 1-3% target range by a significant margin for the third consecutive year. In our view, the persistence of deflation is a result of more than just supply-side factors. We believe muted demand-side pressures are likely to continue, consistent with our more cautious view on the growth outlook. […] The risk of deflation becoming more entrenched – as evident in the broadening of negative inflation in the CPI basket and still-weak underlying demand pressures – supports our forecast for a December interest rate cut, in addition to the sequential economic contraction in Q3.”

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