Bangkok: The Ministry of Commerce has raised alarms over a potential conflict in the Middle East, which could lead to significant hikes in food prices, particularly affecting fast food and rice dishes, and resulting in a potential inflation spike of 1-3 percent. The ministry disclosed that February's inflation rate stood at -0.88 percent, signaling the 11th consecutive month of negative inflation.
According to Thai News Agency, Mr. Nantapong Chiraleartpong, Director of the Office of Trade Policy and Strategy (OTPS) and the spokesperson for the Ministry of Commerce, noted that the Consumer Price Index (CPI) for February 2026 saw a decrease of 0.88 percent compared to February 2025. This represents the most substantial decline in four months and the 11th consecutive month of negative inflation. Compared to January 2026, the CPI decreased by -0.24 percent. The average inflation rate for the first two months of 2026 shows a decrease of 0.77 percent, mainly attributed to reduced prices of oil, electricity, and pork. Thailand's inflation rate remains the lowest among the 10 ASEAN nations.
Mr. Nanthapong emphasized that rising oil prices, linked to the closure of the Strait of Hormuz due to the Middle East conflict, will likely maintain negative inflation trends. This rise could potentially increase the electricity FT (Fuel Adjustment Charge) and affect the prices of processed and ready-to-eat meals. The Ministry of Commerce has outlined three potential scenarios: If global crude oil prices rise to around US$80/barrel, inflation could increase by 1-2 percent. Should the price of processed food nationwide rise by 10 percent, a further increase to US$100/barrel could push inflation to 2-3 percent, with regional food price hikes of 20 percent. A rise to US$120/barrel may see inflation rates exceed 3 percent, with nationwide processed food prices increasing by 10 percent and up to 50 percent in various regions.
The Ministry believes that a swift resolution to the conflict could mitigate severe inflationary impacts. It forecasts an increase in the inflation rate by 1-3 percent, contingent on the conflict's intensity and government intervention concerning oil prices. The Ministry is tasked with preventing drastic price hikes in processed foods and ready-to-eat meals, as these prices are unlikely to decrease even if oil prices fall. Close monitoring of energy costs, transportation expenses, and public transportation fares is essential, as these are often cited in price increase justifications. The Ministry of Commerce is committed to stringent control over these factors to stabilize inflation.