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Thai commerce minister sees inflation at 0.5% in May

Tan KW
Publish date: Mon, 05 Jun 2023, 07:12 AM
Tan KW
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BANGKOK, June 3 - Thailand's headline inflation was expected at about 0.5% in May as food and energy prices dropped, its commerce minister said.

The pace would show a sharp fall from April's year-on-year figure of 2.67%.

The ministry is due to release May inflation data on June 6. Analysts polled by Reuters projected headline inflation at 1.65% for May.

In the whole of 2023, inflation should not exceed 2%, Commerce Minister Jurin Laksanawisit said in a recorded Facebook Live item.

Thailand's central bank has also raised its key rate by a quarter point on Wednesday, saying core inflation remained elevated but it is ready to normalise policy depending on the economic outlook.

With headline inflation already back in the central bank's target range, some analysts suggested the widely expected rate rise could mark the end of its tightening cycle.

The Bank of Thailand's (BOT) monetary policy committee voted unanimously to raise the one-day repurchase rate for a sixth straight meeting to 2.00%, as expected by 17 of 22 economists polled by Reuters.

The Committee said it was prepared to adjust the size and timing of policy normalisation should the evolving growth and inflation outlook differ from the current assessment.

With Wednesday's move, the BOT has raised its key rate by a total of 150 basis points since August.

"Overall, policy implementation has been appropriate and will continue," Assistant Governor Piti Disyatat told a news conference, adding that while headline inflation slowed, core inflation remained elevated which warranted monitoring.

"Inflationary risks stem from greater demand pressures amid expanding economic activity and higher cost pass-through from supply pressures," the BOT said in a statement.

Headline inflation was seen at 2.5% this year, compared with 2.9% in March, the central bank said on Wednesday, while maintaining its earlier forecast of 2.4% for 2024.

The BOT predicted core inflation at 2.0% this year and in 2024.

In April, headline inflation dropped to 2.67%, inside the BOT's target range of 1% to 3%, while core inflation was 1.66%.

 - Reuters

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