Thailand’s CPI falls for 3rd straight month in June

Hanoi (VNA) – Thailand’s consumer price index (CPI) declined for a third consecutive month in June, attributed to lower energy and food prices, though there are no signs of deflation, according to the country’s Commerce Ministry.

Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office said that headline inflation dipped by 0.25% year-on-year to 100.42 in June.

The decline is attributed to falling prices of energy, including fuel and electricity, in addition to fresh food prices, particularly eggs, fresh vegetables and fresh fruit, he said.

Inflation is expected to decrease this month, with headline inflation for the third quarter remaining similar to the previous quarter, said Poonpong.

According to observers, one factor decelerating inflation is reduced Dubai crude oil prices as Middle East tension eased following a ceasefire agreement.

Other factors are the government's measures to ease living costs, such as reducing electricity fees for May-August to 3.98 THB (11 US cent) per unit; an increased supply of fresh vegetables; and marketing promotions by large businesses that align with the government's stimulus.

The commerce ministry predicted headline inflation this year would range between 0% and 1%, with a midpoint of 0.5%.

Thanavath Phonvichai, President of the University of the Thai Chamber of Commerce, said despite the negative headline inflation over three months, it is not considered technical deflation yet.

The 0.97% year-on-year increase of core inflation in the first five months indicated a mild recovery in purchasing power, said Thanavath.

With the Thai economy expected to grow 2% in the first half of the year, he said the Bank of Thailand should ease monetary policy by reducing interest rates, while the government should implement urgent stimulus initiatives using its allocated budget./.