English
Thailand: Inflation rate revised up to 0.8-1.6%
The Commerce Ministry has revised the national inflation rate to 0.8-1.6% this year from 0.7-1.7% after headline prices rose for a 12th straight month in June.
The ministry’s revised forecast assumed a Dubai crude oil price in a range of US$60-70 per barrel, Thai economic growth of 4.2-4.7%, an exchange rate of 32-34 baht to the dollar and export growth of 8%, said Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office.
The ministry reported yesterday the headline inflation rate, which is measured by the consumer price index (CPI), eased to 1.38% on an annual basis in June after a 1.49% gain in May.
Inflation in June largely resulted from rising transport and communication costs, notably from fuel oil, tobacco and alcoholic drinks, and housing and furnishings.
But food and non-alcoholic drink prices dropped, particularly for fresh fruit and vegetables such as Chinese kale, cabbage, mangoes, bananas, rambutan and pineapple, which reported a 5.86% year-on-year price drop in June against a 0.22% increase in May.
Of the 422 products and service items used to gauge inflation, the prices of 217 items such as milled rice, transport and communication fees and steel rose last month. No price changes were registered for 80 items, while 125, including fruits and vegetables, saw prices drop.
On a monthly basis, the ministry reported that prices shrank 0.09% in June against a 0.56% increase in May. The fall was mainly because of lower prices for fresh food such as vegetables, fruit and meat.
But the inflation rate for the first six months still managed to edge up 0.97% year-on-year, nearing the 1% hike forecast by the Commerce Ministry.
Core CPI, which excludes raw food and energy prices, rose 0.83% year-on-year in June and 0.11% month-on-month. For the past six months, core inflation has averaged 0.69%.
Core CPI, which excludes raw food and energy prices, rose 0.83% year–on–year in June and 0.11% month–on–month from May. For the first sixth months, core inflation averaged 0.69%
The latest forecast by the Commerce Ministry reflects the fact that Thailand’s economy remains fragile despite the recovery, said Thanavath Phonvichai, vice-president for research at the University of the Thai Chamber of Commerce.
Based on core inflation, which stood at 0.69% for the first six months, the Thai economy showed signs of recovery, albeit limited, as farm prices have yet to significantly increase and people are reluctant to spend.
“With the core inflation rate still below 1%, we believe the Bank of Thailand is likely to keep its policy rate until year-end to curb higher production costs and to stimulate the economy,” he said. “The government needs to keep spurring the provincial and regional economies and push up farm product prices.”
Source: https://www.bangkokpost.com/business/news/1496526/inflation-rate-revised-up-to-0-8-1-6-