Thailand inflation may hit 4-5% as energy costs warrant loan decree
Ekniti says Thailand’s reliance on imported oil and gas is fuelling inflation and makes urgent borrowing necessary to prepare for wider impacts.
- Thailand's monthly inflation is projected to rise to 4-5% from its current 2.9%, primarily driven by increasing energy costs.
- The main cause of the economic pressure is the country's heavy reliance on imported oil and natural gas, which directly affects consumer prices and living costs.
- The government is justifying an emergency borrowing decree as an urgent necessity to manage the crisis, framing it as a direct threat to people's livelihoods.
- A THB200 billion portion of the loan is specifically designated for an energy transition to reduce the country's long-term dependence on energy imports.
Finance Minister Ekniti Nitithanprapas said at Government House on Monday (May 11, 2026), in response to the People’s Party’s petition to the Constitutional Court over THB200 billion in borrowing for the energy transition under the THB400 billion emergency borrowing decree, and objections that the plan did not meet the criteria for urgent necessity or a crisis, that Thailand’s current economic situation was facing a complex crisis whose end could not yet be clearly predicted.
Ekniti said the main cause of the crisis was rising energy costs, with Thailand heavily reliant on imports of oil and natural gas.
The issue had also been raised for discussion at an ASEAN meeting because Thailand was among the countries that import energy and depend heavily on energy from outside the country.
Reliance on foreign energy has a direct effect on inflation.
The latest monthly inflation was 2.9% and was trending upwards, potentially reaching 4-5% under pressure from goods costs, affecting living costs and consumer goods prices.
Food prices in particular have already risen by nearly 10%, making it necessary for the government to prepare measures to cope with crises that may emerge in successive waves.
On the possibility that inflation could rise above the full-year monetary policy target range of 1-3%, and questions over whether coordination had taken place with the Bank of Thailand (BOT) to use monetary measures to manage inflation, Ekniti said average full-year inflation remained close to the target range and was expected not to exceed 3%.
The issue had already been discussed with the BOT at a joint meeting of four economic agencies.
Ekniti stressed that this crisis began with energy problems, following the war and energy crises, before spreading into a cost crisis.
This could be seen from the latest inflation figure of 2.9%, while Thailand relies heavily on imports of oil and natural gas, especially oil, which Thailand cannot produce in sufficient quantities.
It was therefore necessary to speed up efforts to address the problem.
Ekniti said the emergency decree empowering the Ministry of Finance to borrow was urgently necessary to prepare for a crisis that could spread.
He said this crisis differed from the 1997 crisis, which was a financial institution crisis, and from the Thai Khem Khaeng (Strong Thailand) plan period, which was a crisis from outside, because this time it was directly a crisis of people’s livelihoods and living costs.
The government, therefore, had to prepare to reduce the impact on the public at large.
Regarding the Democrat Party’s statement that the credit rating agency Moody’s had praised Thailand as having a good economy while the government was still pressing ahead with borrowing, Ekniti said Moody’s praise of Thailand resulted from explanations about the strength and stability of the country’s international reserves.
He said this was a separate matter from domestic hardship, which the government needed to address quickly, and was therefore a key reason for issuing this borrowing decree.
For spending under the loan, the government has set a framework under the “5T” strategy to screen projects for maximum efficiency.
It comprises Targeted, providing focused relief for groups directly affected; Transition, reducing the burden on the public while restructuring energy and reducing import reliance in the long term; Transform, reforming and restructuring the economy so people can emerge stronger after the crisis ends; and Transparency, ensuring transparency and scrutiny by using digital technology to disclose screening criteria and the details of every project to the public.
In addition, there is Together, or participation, under which the government will bring in the private sector and invite the chairman of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) to join the project screening committee.
