Thai headline inflation misses forecast in June, below central bank target

THAILAND’S annual headline inflation rate slowed in June as fresh food prices decelerated and the impact of last year’s low base of electricity prices ended, the commerce ministry said on Friday (Jul 5).

The headline consumer price index (CPI) rose 0.62 per cent in June from a year earlier, slowing from the previous month’s annual rise of 1.54 per cent, and compared with a forecast increase of 1.12 per cent in a Reuters poll.

The June figure again slipped below the central bank’s target range of 1 to 3 per cent.

Fresh food prices slowed in June because of favourable weather, while other goods prices had a limited impact on inflation, the ministry said in a statement.

The annual headline inflation rate in the third quarter is expected to be close to the second quarter’s 0.78 per cent pace, said Poonpong Naiyanapakorn, the director of the trade policy and strategy office.

Headline inflation is expected to be more than 1 per cent in the fourth quarter, he added.

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Current inflation remains appropriate for the economy, he said.

“It is stable and predictable for both business operators and households to make plans,” he added.

In the first six months of 2024, average annual headline inflation was flat, and the commerce ministry retained its forecast for the year of between 0 and 1 per cent.

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Thai central bank sees no need to cut rates despite slow recovery

The Bank of Thailand has said it expects headline inflation to return to the target range in the fourth quarter. It has been keeping interest rates at decade highs despite intense government pressure to reduce borrowing costs to boost economic growth.

The core CPI, which excludes volatile food and energy prices, rose 0.36 per cent on the year in June and increased 0.41 per cent in the first half of 2024. REUTERS