UOB Global Economics & Markets Research, led by economists Enrico Tanuwidjaja and Sathit Talaengsatya, analyzes Thailand’s July CPI undershoot driven by lower fuel prices while core inflation edges higher. Core CPI nevertheless firmed to +1.34% y/y and +0.08% m/m, signaling continued, albeit contained, indirect cost pass-through." "The BOT’s Jun baseline projects headline inflation at 2.8% in 2026 and 1.4% in 2027, and core inflation at 1.5% and 1.4%, respectively, as supply pressures and unfavorable base effects fade next year." "We maintain our headline CPI forecasts at 2.8% in 2026 and 1.4% in 2027 and expect the BoT to hold its policy rate at 1.00% through end-2027. "A prolonged hold therefore offers the best balance between maintaining price stability and avoiding an unnecessary tightening of already-fragile financial conditions."