Thailand's consumer price index (CPI) sustained deflation or lower prices for the third straight month in June, possibly pressuring the nation's central bank to move to an easier monetary policy.

Thailand's headline CPI declined 0.25% in June from a year earlier, again striking below the Bank of Thailand's annual 1% to 3% inflation target band. In May, the CPI had declined by 0.57% on year, reported the Ministry of Commerce.

Thailand's CPI in the third quarter is expected to post more deflation, before turning positive in the final quarter of the year, Poonpong Naiyanapakorn of Thailand Trade Policy and Strategy Office, told a press conference on Monday, reported Channel News Asia.

Thailand's core CPI, which strips out fresh food and energy prices, rose 1.06% in June on year.

For the first six months of 2025, Thailand's annual headline CPI budged up 0.37% on year, while the core inflation rate pegged up at 0.97% on year in the same time frame, according to official figures.

Thailand's consumers in June experienced lower prices not only in food and energy, but also for clothing, which fell 0.88% on year in June, while medical bills fell 0.80% on year, and housing costs declined 0.35% on year, reported the Ministry of Commerce.

Like many other central banks, the Bank of Thailand lowered interest rates in the pandemic era but then raised rates in the aftermath to battle higher inflation.

The Bank of Thailand reduced its key policy interest rate to 0.5% in 2020-2022 but then raised the rate to a crest of 2.5% in 2024. Since then, the central bank lowered the key rate, in stages, to 1.75% in April, but left the rate unchanged at its late June meeting.

In late June, the Bank of Thailand forecast the nation's headline CPI would rise by 0.5% in 2025 and then by 0.8% in 2026, still below its target.

The central bank estimated the nation's real gross domestic product (GDP) will expand by 2.3% in 2025, and then 1.7% in 2026.

The Bank of Thailand has been criticized for not easing monetary policy to boost growth and possibly decrease the exchange rate of the Thai baht, which would reduce the cost of Thailand for foreign tourists.

For example, the Bank of Thailand "should be more aggressive in cutting borrowing costs given its bleak growth outlook and subdued inflation," Somprawin Manprasert, a candidate seeking to become the Bank of Thailand's new governor, told the Bangkok Post in June, reported the paper.

A new Bank of Thailand Governor will be selected in September.