Thai inflation slows in April, but pace seen quickening

THAILAND'S headline consumer price index (CPI) in April rose 4.65 per cent from a year earlier, driven by higher energy and food prices, the commerce ministry said on Thursday (May 5), though the figure came in below forecasts.

The CPI was expected to rise 4.98 per cent in a Reuters poll. It follows March’s 5.73 per cent jump, the fastest pace in 13 years.

Despite April’s price slowdown, helped by base effects, headline inflation is likely to exceed 5 per cent in the coming months following the end of a cap on diesel prices, ministry official Ronnarong Phoolpipat told a news conference.

“As oil prices rise, product prices will also generally increase. But it does not mean inflation will be much higher. We also have to look at many factors,” he said.

Government measures, including price controls on essential goods and subsidies have helped slow a rise in inflation, the ministry has said.

The ministry is maintaining its forecast for headline inflation of 4-5 per cent this year, exceeding the central bank’s target range of 1-3 per cent.

However, the central bank is not expected to raise rates soon, as it has said its priority is to support growth. It also predicts inflation will exceed 5 per cent in the second and third quarters before easing.

The core CPI index, which strips out volatile energy and fresh food prices, was up 2.0 per cent in April from a year earlier, unchanged from the previous month, and in line with a forecast.

In the January-April period, headline inflation was 4.71 per cent, with the core rate at 1.58 per cent.

SEE ALSO

Thailand inflation spike may tilt odds in favour of early rate hikes

REUTERS