In April 2023, Thailand experienced a significant drop in its headline inflation, which measures the change in the prices of a basket of goods and services consumed by households.

According to the commerce ministry, the headline consumer price index (CPI) rose by only 2.67% year-on-year, the lowest rate since December 2022. This was close to the expectations of a 2.7% increase in a Reuters poll.

The main factors behind the decline in inflation were lower energy and food prices, as well as a high base effect from 2022. Energy prices fell by 1.9% month-on-month, while food prices decreased by 0.4%. The high base effect means that inflation was lower because it was compared to a higher level of prices in the same month of the previous year.

The core CPI, which excludes volatile items such as food and energy, also slowed down to 1.66% year-on-year, the lowest rate since January 2022. This was below the forecast of a 1.7% increase in a Reuters poll.

The commerce ministry said that headline inflation should fall further in May, possibly below 2%, due to a higher base effect and lower fuel prices. It maintained its forecast for the average headline inflation for 2023 at between 1.7% and 2.7%, which was revised down from 2% to 3% last month.

Headline inflation has returned to the Bank of Thailand’s (BOT) target range of 1% to 3% for the second consecutive month. However, the BOT has been tightening its monetary policy since March, when it raised its policy interest rate by 25 basis points to 1.75%, citing persistent inflation risks. The next policy review is scheduled for May 31, when economists expect another rate hike.

About the author

Nguyen Trang is a journalist based in Hanoi, Vietnam. She has been working for the Vietnam News Agency since 2015, covering topics such as politics, culture, and social issues.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

Thailand’s Economy Remains Resilient says World Bank

Tourism arrivals reached 45 percent of the pre-pandemic level in September, surpassing those in Indonesia and the Philippines.

Thailand 2023 Growth downgraded Amid Mounting Headwinds

The Ministry of Finance has indicated that the Thai economy may not meet the predicted economic growth of 3.8% next year as a result of deteriorated global economic conditions.

Thai exports contracted for the second consecutive month in November

The Commerce Ministry reported on Tuesday that exports dropped for a second straight month in November, blaming the global economic slowdown and China’s lockdown measures.