Thailand’s April headline inflation lowest in 16 months, to drop further

THAILAND’S headline inflation dropped to its lowest in 16 months in April thanks to lower energy and food prices and a high base in 2022, the commerce ministry said on Wednesday (May 3).

The headline consumer price index (CPI) rose 2.67 per cent in April from a year earlier, close to a rise of 2.7 per cent forecast in a Reuters poll, and against March’s 2.83 per cent increase.

The core CPI index in April was up 1.66 per cent from a year ago – the slowest in 15 months and below a forecast increase of 1.7 per cent.

It was the second month in a row that headline inflation came in within the central bank’s target range of 1 per cent to 3 per cent. The commerce ministry on Wednesday said headline inflation should fall sharply in May due to a high base in 2022 and lower fuel prices.

“Inflation could be less than 2 per cent in May as last year’s base was very high... the figure might be the lowest in 20 months,” commerce ministry official Poonpong Naiyanapakorn told a press conference.

Ministry official Wichanun Niwatjinda said headline inflation was expected at less than 3 per cent in the April to June quarter, and that spending ahead of Thailand’s May 14 election had been discounted.

The commerce ministry maintained its forecast for average headline inflation at between 1.7 per cent and 2.7 per cent for the year, which was cut last month from 2 per cent to 3 per cent.

In January to April, headline inflation was 3.58 per cent, with the core rate at 2.09 per cent, the ministry said.

In March, the Bank of Thailand raised its policy interest rate by a quarter point to 1.75 per cent and said its tightening would continue since inflation risks persisted.

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It will next review policy on May 31, when economists expect a further hike. REUTERS