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Inflation in May Hits Lowest Level in 21 Months in Thailand

Thailand’s headline inflation rate reached a 21-month low in May, driven by lower energy and food prices, as well as a high base from the previous year, according to the Commerce Ministry’s latest report on Tuesday.

The consumer price index (CPI) for headline inflation rose by a modest 0.53% in May compared to the same period last year. This figure fell below market expectations of 1.70% and marked a significant decrease from April’s year-on-year increase of 2.67%.

Meanwhile, the core CPI, which excludes volatile food and energy prices, increased by 1.55% in May compared to the previous year. Although slightly below the projected 1.6% increase, it remained relatively stable when compared to April’s 1.66% rise.

This marks the third consecutive month in which headline inflation has remained within the target range set by the central bank, which aims for inflation rates between 1% and 3%.

The Commerce Department anticipates that headline inflation will average between 1.7% and 2.7% for the year as a whole.

During the January to May period, annual headline inflation stood at 2.96%, with core inflation at 1.98%, as reported by the ministry.

Last week, the Bank of Thailand responded to rising core inflation by raising its policy rate by a quarter point to 2%. The next rate review is scheduled for August 2nd, when further adjustments may be considered in response to prevailing economic conditions.

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