Phuket Welcomes 2026 with Deflation

Thailand ended 2025 with an unexpected economic indicator: inflation dropped into negative territory, standing at -0.28%. Prices continued to fall even during the high tourist season in December, which is highly atypical for a country accustomed to rising living costs during peak tourism periods.

This economic phenomenon is the result of several factors that have made life on the island and in the Kingdom slightly more affordable.

Why Did Prices Go Down?

The primary contributor to deflation was a significant reduction in energy costs. Thanks to favorable conditions in global markets and the strengthening of the Thai baht, the cost of electricity and fuel for the population has decreased.

Although prices for food and ready-made meals (the Food & Non-alcoholic Beverages category) rose slightly, this increase was weak and could not offset the effect of cheaper energy.

What Awaits Us in 2026?

Authorities and analysts predict that the downward trend in prices will continue into the first quarter of 2026. This is due to oil prices remaining below last year's levels, while economic demand remains subdued.

However, there are risk factors. Political uncertainty following the general election in February could impact the economy. Nevertheless, the official inflation forecast for the entire year of 2026 remains very comfortable, ranging between 0–1%.

Let's sum it up

For residents and guests of Phuket, this is good news: the cost of living remains stable, and expenses for transport and utilities are weighing less on budgets than in previous years.