Thailand inflation rises by 7.61%, a slight dip from June on the back of lower energy prices help

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Thailand’s headline consumer price index (CPI) saw a slight drop during the month of July to 7.61% from the 7.66% reported during June, as global energy prices eased, and authorities tried to keep a check on runaway price increases for essentials.

The monthly data, which was announced by the Ministry of Commerce, came in slightly above the market expectations of 7.5% but was the first decline in inflation numbers in the past 7 months.

“This was the first monthly drop this year,” said Ronarong Phoolpipat, director-general of the ministry’s Trade Policy and Strategy Office.

Ronarong said energy products are still the main reason for inflation in July while demand for products was increasing from improvements in tourism and exports.

“Energy products’ prices increased by 33.82% which contributed to 52.57% of inflation in July even though the prices of gasohol and benzine have dropped from June but the prices of diesel and cooking gas did not decrease,” he said.

Energy costs have come down sharply over the past couple of months as evident from the decline in Brent Crude prices which are currently trading at $94.78/barrel against the nearly $124/barrel in June.

Easing oil prices over the past 2 months has helped keep inflation stable in July 2022

Ronarong said the ministry’s Trade Policy and Strategy Office also raised its forecast for headline inflation to 5.5%-6.5% from the previous projection of 4%-5% with the average of 6%.

The new forecast is based on assumptions that the gross domestic product will expand by 2.5%-3.5% this year, the Dubai oil price would stay around US$90-$110 per barrel and the Baht average would be around 33.50 – 35.50 Baht against the US$.

Ronarong said inflation is expected to continue to increase from a low base last year but inflation in Q4 is expected to drop from the high base last year.

“External factors have a lot of impacts on Thailand’s inflation and inflation in other countries are increasing every month, so nobody really know what is going to happen in the future,” he said.

Excluding energy and food categories, core CPI in July rose by 2.99% year-on-year. For the first 7 months, the core CPI jumped by 2.01%.

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