Thai headline inflation at 22-month low, lowers 2023 price rise forecast

Tourists shop for street foods ahead of Lunar New Year celebrations in Bangkok’s Chinatown, Thailand, Jan 19, 2023. REUTERS/Athit Perawongmetha/File photo

BANGKOK  -Thailand’s annual headline inflation unexpectedly rose in June but at its slowest pace in 22 months, and the commerce ministry on Wednesday lowered its forecast for consumer prices rises for the whole year.

The headline consumer price index (CPI) increased 0.23 percent in June from a year earlier, compared with a forecast fall of 0.1 percent in a Reuters poll, and against May’s 0.53 percent year-on-year rise.

The slower headline pace was due to lower food and energy prices and a high base last year, which should continue to help hold down consumer prices, the ministry said.

It was the second straight month that the headline CPI dropped below the central bank’s target range of 1 percent to 3 percent.

In June, the core CPI was up 1.32 percent from a year earlier, compared with a forecast for a 1.4 percent rise in the poll.

“Compared with other countries, Thailand has very low inflation,” ministry official Wichanun Niwatjinda told a briefing.

The ministry predicts the headline CPI will rise 0.77 percent year-on-year in the third quarter and 0.62 percent in the final quarter of the year, he said.

“That means full-year inflation will be at 1 percent to 2 percent,” he said, adding that was cut from the 1.7 percent to 2.7 percent projected previously.

In the January-June period, annual headline inflation was 2.49 percent and the core rate was at 1.87 percent.

In May, Thailand’s central bank raised its policy interest rate by a quarter point to 2 percent. It will next review policy on Aug. 2, when some economists expect no rate change while others see a further hike.

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