Thailand's headline inflation reached 1.95% YoY in July 2025, slowing from 2.42% in June and marking the fourth consecutive month of expansion. Key drivers include elevated fuel prices from Middle East tensions, rising prepared food costs, and fresh vegetable price hikes from weak El Niño conditions. Critically, stagflation risk is diminishing as private consumption recovery accelerates (4.9% in June) and consumer confidence breaks above the 50-point threshold (51.1 in July), despite inflation moderating. The Commerce Ministry forecasts 2025 inflation at 1.5–2.5%, with Q3 projected at 2.09%.