Inflation in Thailand continues to decline faster than forecast
2023.02.06 02:57
Inflation in Thailand continues to decline faster than forecast
By Tiffany Smith
Budrigannews.com – Due to lower energy and food prices, Thailand’s headline inflation fell to its lowest level in nine months and came in below analyst expectations. The commerce ministry predicts that consumer prices will continue to fall this year.
According to ministry data released on Monday, the headline consumer price index (CPI) increased by 5.02 percent in January compared to the previous year, in contrast to the 5.12 percent rise that was predicted by a Reuters poll.
According to a senior official from the commerce ministry, Wichanun Niwatjinda, at a news conference, inflation is anticipated to be below 5% in February due to lower oil prices.
“In January, oil contributed one percentage point to inflation. Therefore, if oil prices fall, inflation will significantly decrease,” he stated.
Despite this, the inflation rate is still higher than the target range of 1% to 3% set by the central bank. This suggests that the Bank of Thailand (BOT) will raise its key interest rate again after raising it for four meetings in a row to try to bring prices back within the target range.
In comparison to the expected increase of 3.10 percent in January, the core CPI index increased by 3.04 percent.
The BOT stated earlier that a policy that is compatible with growth and inflation calls for a consistent, gradual rate increase. The policy will be reviewed again on March 29.
Inflation, according to Finance Minister Arkhom Termpittayapaisith, should return to target this year.
Taking into account the upcoming elections and a rebound in tourism, Wichanun stated that the commerce ministry is maintaining its forecast for headline inflation at 2% to 3% this year.
He stated that the ministry anticipates 22 million to 25 million foreign tourist arrivals this year and that more tourists would lead to higher demand-side inflation.
With a core rate of 2.51 percent, headline inflation in 2022 reached a 24-year high of 6.08 percent.
