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Thai inflation rate slows to 0.45% in July, below forecast

Thai inflation rate slows to 0.45% in July, below forecast

FILE PHOTO: People wearing face masks shop for street food in Chinatown amid the spread of COVID-19 in Bangkok, Thailand on Jan 6, 2021. (Reuters/Athit Perawongmetha)

BANGKOK: Thailand's headline consumer price index (CPI) in July rose a smaller-than-expected 0.45 per cent from a year earlier, weighed down by government subsidies on utilities to cushion the impact of a prolonged COVID-19 outbreak, the commerce ministry said.

The figure compared with a forecast for a rise of 0.97 per cent in a Reuters poll and followed June's 1.25 per cent increase.

Without the subsidies, which will end in August, the headline CPI would have risen 1.8 per cent, ministry official Wichanun Niwatjinda told a briefing on Thursday (Aug 5).

The CPI index in August is expected to rise but not markedly due to the subsidies and with oil prices now below earlier levels, he said.

The ministry is maintaining its forecast for headline inflation in a range of 0.7 to 1.7 per cent this year, with inflation seen at 1.01 per cent in the third quarter and 1.9 per cent in the fourth quarter, Wichanun said.

"But if there are additional or continuous government measures, the numbers will drop," he added.

The central bank has set a target for headline inflation in a range of 1 to 3 per cent.

The government is expected to continue providing subsidies along with relief measures as the Southeast Asian country struggles with its biggest wave of infections.

In July, the core CPI index was up 0.14 per cent from a year earlier, versus a forecast for a 0.26 per cent rise.

In the January to July period, headline CPI rose 0.83 per cent from a year earlier, with the core CPI up 0.26 per cent.

Source: Reuters/lk

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