BANGKOK :Thailand’s annual inflation rate was negative for a second straight month in May, the commerce ministry said on Friday as it cut its full-year forecast to close to zero, just weeks ahead of the central bank’s next monetary policy review.
The consumer price index dropped 0.57 per cent in May from a year earlier, not quite as steep as the 0.80 per cent fall forecast in a Reuters poll, following a 0.22 per cent fall in April.
It was the third month in a row that the inflation rate has been below the central bank’s target range of 1.0 per cent to 3.0 per cent.
Poonpong Naiyanapakorn, head of the ministry’s Trade Policy and Strategy Office, said a positive inflation reading was expected in June, but the forecast of 0.2 per cent to 0.4 per cent was still below the central bank’s target.
The ministry cut its full-year inflation forecast to 0.0 per cent to 1.0 per cent from 0.3 per cent to 1.3 per cent seen previously.
Poonpong said prices fell in May due to lower energy prices and more production of agricultural goods such as vegetables.
The core CPI, which excludes volatile food and energy prices, was up 1.09 per cent in May from a year earlier, higher than a forecast rise of 0.94 per cent.
For the first five months of the year, headline inflation averaged 0.48 per cent and the core rate was at 0.95 per cent, Poonpong said.
In April, the Bank of Thailand cut its key interest rate by a quarter point to 1.75 per cent, the lowest level in two years, and reduced its growth and inflation forecasts for 2025, due to risks from U.S. tariffs. The next rate meeting is on June 25.
Deputy BOT Governor Piti Disyatat told Reuters last month the central bank was ready to ease policy again if needed to support Southeast Asia’s second-largest economy through the global trade war. He said low inflation was not a reflection of weak domestic demand or deflation.
