Lower energy and food costs, a high base effect from 2022, and these variables alone were the primary drivers of the fall in inflation.
Thailand’s headline inflation, which gauges changes in the prices of a variety of household-consumed goods and services, saw a considerable decline in April 2023.
The consumer price index (CPI) for the headline figure increased by just 2.67% year over year, the slowest rate since December 2022, according to the trade ministry. This was in line with a Reuters poll’s prediction of a 2.7% increase.
Lower prices for food and energy, as well as a large base effect starting in 2022, were the key causes of the drop in inflation. Compared to the previous month, energy prices dropped by 1.9%, while food prices fell by 0.4%. Because prices were compared to a higher level in the same month the year before, the high base effect indicates that inflation was lower.
The core CPI, which does not include volatile categories like food and energy, also dropped, falling to 1.66 percent year over year, the lowest level since January 2022. This was under the 1.7% growth predicted in a Reuters poll.
Due to a bigger base effect and lower gasoline prices, the commerce ministry predicted that overall inflation should decrease much further in May, probably to below 2%. After being reduced from 2% to 3% last month, it kept its prediction for 2023’s average headline inflation at between 1.7% and 2.7%.
For the second month in a row, headline inflation is once again within the Bank of Thailand’s (BOT) 1% to 3% target range. The BOT has, however, been tightening its monetary policy ever since it increased its policy interest rate by 25 basis points to 1.75% in March, citing lingering inflation risks. The following policy review is slated for May 31, when economists anticipate another rate increase.
Thai headline inflation is at its lowest level in 16 months.
Lower energy and food costs, a high base effect from 2022, and these variables alone were the primary drivers of the fall in inflation.
Thailand’s headline inflation, which gauges changes in the prices of a variety of household-consumed goods and services, saw a considerable decline in April 2023.
The consumer price index (CPI) for the headline figure increased by just 2.67% year over year, the slowest rate since December 2022, according to the trade ministry. This was in line with a Reuters poll’s prediction of a 2.7% increase.
Lower prices for food and energy, as well as a large base effect starting in 2022, were the key causes of the drop in inflation. Compared to the previous month, energy prices dropped by 1.9%, while food prices fell by 0.4%. Because prices were compared to a higher level in the same month the year before, the high base effect indicates that inflation was lower.
The core CPI, which does not include volatile categories like food and energy, also dropped, falling to 1.66 percent year over year, the lowest level since January 2022. This was under the 1.7% growth predicted in a Reuters poll.
Due to a bigger base effect and lower gasoline prices, the commerce ministry predicted that overall inflation should decrease much further in May, probably to below 2%. After being reduced from 2% to 3% last month, it kept its prediction for 2023’s average headline inflation at between 1.7% and 2.7%.
For the second month in a row, headline inflation is once again within the Bank of Thailand’s (BOT) 1% to 3% target range. The BOT has, however, been tightening its monetary policy ever since it increased its policy interest rate by 25 basis points to 1.75% in March, citing lingering inflation risks. The following policy review is slated for May 31, when economists anticipate another rate increase.
