China-led deflation looms as Thailand, Indonesia and Malaysia see declining inflation

[SINGAPORE] After years of stable inflation, Asean economies that once battled surging prices post-pandemic may now be facing the opposite threat of deflation, as global trade tensions and slowing growth weigh on demand.

Thailand’s annual inflation in May reflected negative growth for the second straight month, the commerce ministry reported on Friday (Jun 6). The consumer price index fell 0.57 per cent, following a 0.22 per cent fall in April – the first two negative prints since March the previous year.

“Core inflation remains below target, reinforcing the presence of slack in the economy,” said Bank of America (BOA) emerging Asia economist Pipat Luengnaruemitchai in a report following April’s data.