June inflation in Thailand sees a big drop over the previous month
Thailand reported a month-on-month drop in inflation in June to 0.62 %, compared to 1.54% in May, a decline attributed to the end of the low base impact of electricity costs from the previous month, Poonpong Naiyanapakorn, director of the Trade Policy and Strategy Office (TPSO), said on Friday.
The Consumer Price Index (CPI) rose year on year to 108.50 in June, up from 107.83 in June 2023.
The prices of fresh food items increased at a slower rate due to favourable weather conditions for cultivation after the extreme heat had passed. Other goods and services had minimal impact on inflation.
The 0.62% June inflation was driven by food and non-alcoholic beverages, which rose 0.48%. This was due to significant price hikes in essential items such as rice, flour, and flour-based products, fresh food items such as eggs and fresh fruits, and fresh vegetables. The prices of meals prepared at home and outside, including ready-made meals, rice with curry, and ordered dishes, as well as non-alcoholic beverages like instant coffee and sweetened beverages, also contributed to the rise. Ingredients such as sugar, coconut milk, and curry paste saw price increases as well.
However, several items, such as pork, lime, mackerel, vegetable oil, grilled chicken, tangerines, red onions, and garlic, experienced price drops.
Other categories excluding food and beverages saw a 0.71% increase due to significant price hikes in critical items, particularly fuel, personal care items, and household items such as toilet paper. Alcoholic beverages, including liquor and beer, also contributed to the rise. However, significant price reductions were observed in items such as electricity, laundry detergent, fabric softener, bathroom cleaner, laundry products, dry cleaning solutions, men’s and women’s T-shirts, and shirts.
"The inflation situation is appropriate for the current reality and is rising at a suitable level with stability,” said Poonpong.
Thailand's inflation rate, compared internationally as of May 2024, stood at 1.54%, driven by temporary factors. This rate placed Thailand as the 23rd lowest out of 126 economies that announced figures, and the second lowest in ASEAN among the eight countries – Brunei, Laos, Vietnam, Singapore, the Philippines, Indonesia, and Malaysia – that released figures.
Poonpong said that the general inflation trend for July was expected to be similar to June, with third-quarter inflation likely to remain close to the second quarter’s 0.78%.
Fourth-quarter inflation is expected to exceed 1% due to a high base in 2023 when inflation was negative each month.
