BANGKOK: Thailand’s inflation unexpectedly eases for a third straight month, bolstering the central bank’s view that it can keep interest rates on hold to support the economy.
The consumer price index rose 1.95% in July from a year earlier, slowing from 2.42% in June, Commerce Ministry data showed yesterday.
The reading was below the median estimate in a Bloomberg survey of economists, who had expected inflation to accelerate.
Bank of Thailand Governor Vitai Ratanakorn and his policymakers left the benchmark interest rate unchanged in June, expecting inflation to ease as supply pressures subside.
In early July, Ratanakorn said inflation this year is likely to come in below the central bank’s 2.8% forecast. The next rate decision is on Aug 26.
On a monthly basis, the index fell 0.73% in July, more than the 0.34% decline in June and the median economist estimate of a 0.2% drop.
Meanwhile, core inflation edged up slightly to 1.34% from 1.23% in June.
Nantapong Chiralerspong, director- general of the Commerce Ministry’s Trade Policy and Strategy Office, attributed the slowdown in inflation primarily to a sharp decline in domestic fuel prices, in line with lower global oil prices as Middle East tensions eased last month.
“The situation seems to be under control,” the official said.
“Given the situation in the Middle East, this year’s inflation will likely be in the 1.5% to 2% range,” he added.
Inflation will likely average 2.09% in the third quarter (3Q) and may accelerate to 2.33% in the last three months of the year, compared with 2.7% in the 2Q, according to the trade policy office. — Bloomberg
