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Thailand’s headline consumer price index (CPI) surged more than expected in May, rising by 7.10 per cent from a year earlier, due to higher energy prices, the Commerce Ministry said on Monday.
The monthly CPI increase exceeded the market forecast of 5.8 per cent and was the highest since July 2008. In April, the inflation rate gained by 4.65 per cent year-on-year.
“The spike in the inflation rate was caused by rising energy prices, as well as the expiration of some government subsidies for living costs,” said Ronnarong Phoolpipat, director-general of the ministry’s Trade Policy and Strategy Office.
Those subsidies include a cut in electricity bills and cooking gas prices, according to Ronnarong. Meanwhile, food prices in May also contributed to the jump in inflation, he added.
The aftermath from Ukraine’s war has continued to put a burden on Thailand’s economy, which is still working its way back to pre-pandemic levels. In the first five months of 2022, headline inflation has risen by 5.19 per cent from the prior year.
In 2021, the nation saw a 1.23-per-cent jump in headline inflation.
Excluding energy and food categories, the core CPI in May rose by 2.28 per cent, the biggest surge since March 2012.
The ministry, however, still holds its inflation rate projection at 4 to 5 per cent in 2022. Ronnarong expects the CPI to keep growing in the third quarter before softening down in the fourth quarter.
“The inflation would continue to rise in line with oil prices for the rest of the year,” Ronnarong said. “But the full-year rate is unlikely to exceed 7 per cent.”