Over the past 25 years, Thailand’s flexible inflation targeting framework has generally supported macroeconomic stability, helping to anchor inflation expectations while granting the central bank the flexibility to manage risks to growth and financial stability. However, evolving inflation dynamics, persistent macro-financial vulnerabilities, and heightened uncertainty around long-term growth prospects now warrant a critical reassessment of the framework’s core components—including its target, operating strategy, policy toolkit, and communication approach.

Several developments underscore the need for this re-evaluation. Inflation has become increasingly volatile, driven more by relative price changes arising from supply-side shocks than by broad-based demand pressures—complicating efforts to stabilize inflation. At the same time, elevated household debt continues to constrain growth and amplify financial stability concerns. These issues are compounded by structural headwinds to long-term growth and rising uncertainty in the global economic and policy environment, including trade disruptions and geopolitical shifts.

1. Reconsidering the inflation target: which inflation measure to target, point versus range targeting, appropriate target level, and horizon.
2. Designing optimal monetary policy in the context of supply-driven inflation, financial stability concerns, and heightened uncertainty.
3. Evaluating the effectiveness, trade-offs, and interactions of policy instruments—monetary policy, exchange rate management, capital flow measures, and macroprudential policies.