Oil Shock Pushes Thailand’s Inflation Toward Positive Territory

Thailand is poised to exit a year-long period of falling prices, with its inflation rate nearing positive territory due to surging global crude oil costs. This shift marks an end to a deflationary trend, indicating a turnaround in consumer prices driven primarily by external energy market pressures. The primary catalyst for this impending turnaround is the sustained increase in international crude oil prices, exacerbated by ongoing supply disruptions emanating from the Middle East. Geopolitical tensions and production adjustments in major oil-producing regions have tightened global supply, directly translating into higher import costs for energy-dependent economies like Thailand. This external shock rapidly propagates through the Thai economy, affecting transportation, manufacturing, and consumer goods, compelling businesses to pass on elevated costs, ultimately reversing the recent trend of declining prices.