BANGKOK: The Headline Consumer Price Index (CPI) rose by only 0.53% in May year-on-year, indicating the lowest growth in 21 months. This was primarily attributed to lower energy and food prices, as reported by the Ministry of Commerce on Tuesday (June 6). The ministry also noted the high-base effect but predicted a further decrease in consumer prices in the coming months.
The 0.53% Headline CPI growth in May was significantly lower than the Reuters forecast of 1.7% and the April figure of 2.67% year-on-year. Furthermore, the actual figure in May not only fell within the Central Bank’s target range of 1-3% but also remained below it, according to officials.
The Core CPI index in May increased by 1.55% compared to the previous year, falling below the forecasted increase of 1.6%. This was also lower than April’s rise of 1.66%. The Core CPI index excludes the highly volatile energy and food prices, which have been the main drivers of inflation in Thailand since at least 2022.
According to the Trade Police and Strategy Office (TPSO) whithin the Ministry of Commerce, prices of food and non-alcoholic beverages increased by 3.99% in May.
The index was driven up by products such as chicken eggs, fruits, vegetables, and processed foods, including fresh noodles and instant noodles. Of concern was the significant growth of 23.48% in the fresh vegetables segment.
On the other hand, products like meat, fish, vegetable oil, tamarind, and coconuts were listed by TPSO as having “still low prices.” A more detailed report states that pok and snakehead fish prices declined by 1.21%, while cooking oil and tamarind dropped by 0.88%.
Non-food and beverage categories saw a general decrease in prices by 1.83%, primarily driven by declines in diesel prices. Thai fuel prices decreased by 11.3% in May, following the global market trend.
Among the products and services that became cheaper in May, TPSO listed various goods ranging from air conditioners and washing machines to facial masks and cable TV fees. This marks the first drop in non-food and beverage categories in 26 months.
“The Ministry of Commerce expects headline inflation in 2023 to be between 1.7-2.7%, with 2.2% as the median value,” stated TPSO in a press release.
“The overall consumer confidence index in May rose to 56.6 from 53.5 in April, marking the sixth consecutive month of growth (since December 2022) and the highest level of consumer confidence in 53 months (since January 2019),” TPSO also added.
