Thai inflation slower than expected in July, small rises seen

By Reuters and published by CNA

THAILAND’S annual headline inflation was weaker than expected in July, helped by lower food and energy prices, and the commerce ministry said today (Aug. 7) it projected smaller consumer price rises for the rest of the year.

The headline consumer price index (CPI) increased 0.38 percent in July from a year earlier, compared with a forecast rise of 0.64 percent in a Reuters poll, and against June’s 0.23 percent rise.

It was the third successive month headline inflation was below the central bank’s target range of 1 percent to 3 percent.

The headline CPI in August could rise slightly as some food prices pick up due to drought, while energy prices are likely to increase, Poonpong Naiyanapakorn, head of the ministry’s trade policy and strategy office, told a press conference.

Average headline inflation, however, should remain low at 0.36 percent in the second half of 2023, he added.

“We think it’s lower than 1 percent every month in the remaining five months. But worrying factors are drought and oil prices,” he said.

On Monday, the commerce ministry maintained its prediction of average annual headline inflation at 1 percent to 2 percent, which would be reviewed in September, Poonpong said.

A delay in the formation of a new government has yet to affect consumers’ purchasing power, he added.

In July, the core CPI rose 0.86 percent from a year earlier, compared with a forecast for a 0.90 percent rise in the poll, and against June’s 1.32 percent increase.

Last week, the central bank raised its key interest rate for a seventh straight meeting to 2.25 percent as inflation risks lingered. It will next review monetary policy on Sept. 27.

In the January-July period, the headline CPI rose 2.19 percent year-on-year, with the core CPI up 1.73 percent, the ministry said.

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