Thai inflation slower than expected in July; small rises seen
THAILAND’S annual headline inflation was weaker than expected in July, helped by lower food and energy prices, and the commerce ministry said on Monday (Aug 7) it projected smaller consumer price rises for the rest of the year.
The headline consumer price index (CPI) increased 0.38 per cent in July from a year earlier, compared with a forecast rise of 0.64 per cent in a Reuters poll, and against June’s 0.23 per cent rise.
It was the third successive month headline inflation was below the central bank’s target range of 1 per cent to 3 per cent.
The headline CPI in August could rise slightly as some food prices pick up due to drought, while energy prices are likely to increase, Poonpong Naiyanapakorn, head of the ministry’s trade policy and strategy office, told a press conference.
Average headline inflation, however, should remain low at 0.36 per cent in the second half of 2023, he added.
“We think it’s lower than 1 per cent every month in the remaining five months. But worrying factors are drought and oil prices,” he said.
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On Monday, the commerce ministry maintained its prediction of average annual headline inflation at 1 per cent to 2 per cent, which would be reviewed in September, Poonpong said.
A delay in the formation of a new government has yet to affect consumers’ purchasing power, he added.
In July, the core CPI rose 0.86 per cent from a year earlier, compared with a forecast for a 0.9 per cent rise in the poll, and against June’s 1.32 per cent increase.
Last week, the central bank raised its key interest rate for a seventh straight meeting to 2.25 per cent as inflation risks lingered.
It will next review monetary policy on Sep 27.
In the January to July period, the headline CPI rose 2.19 per cent year-on-year, with the core CPI up 1.73 per cent, the ministry said. REUTERS
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