Thailand’s May headline inflation lowest in 21 months
THAILAND’S headline inflation rate dropped to its lowest in 21 months in May due to falling energy and food prices and a high base in 2022, the commerce ministry said on Tuesday (Jun 6).
The headline consumer price index (CPI) rose 0.5 per cent in May from a year earlier, below a forecast rise of 1.7 per cent in a Reuters poll, and against April’s 2.67 per cent year-on-year increase.
The core CPI index in May rose 1.55 per cent from a year ago, below a forecast increase of 1.6 per cent, and against April’s 1.66 per cent rise.
It was the third month in a row that headline inflation came in within the central bank’s target range of 1 per cent to 3 per cent.
Headline inflation will further slow in May and contract in June, ministry official Wichanun Niwatjinda said.
Falling goods and energy prices combined with a higher base last year attributed to the decline, Wichanun added.
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The commerce ministry forecast average headline inflation at between 1.7 per cent and 2.7 per cent for this year.
In the January to May period, annual headline inflation was 2.96 per cent, with the core rate at 1.98 per cent, the ministry said.
Last week, Thailand’s central bank raised its policy interest rate by a quarter point to 2 per cent, saying that core inflation remained elevated. It will next review the rate on Aug 2.
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However, May’s lower-than-expected inflation data makes a further rate hike less likely, said Kobsidthi Silpachai, head of capital markets research at Kasikornbank.
“This makes it quite hard for the monetary policy committee to continue marching with another hike any time soon, especially now that inflation is below the Bank of Thailand’s inflation target band of 1 per cent to 3 per cent,” he said. REUTERS
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