Thailand's annual headline consumer price index (CPI) in October declined for the first time in more than two years, thanks to falling energy and goods prices due to government support measures, the commerce ministry said on Monday.
The headline CPI fell 0.31% in October from a year earlier, the first annual drop since August 2021. That compared with a forecast 0.0% in a Reuters poll, and versus a 0.3% year-on-year rise in the previous month.
It was the sixth successive monthly headline inflation indicator that was below the central bank’s target range of 1% to 3%.
The headline CPI in November could fall slightly from a year earlier due to government measures to reduce the cost of living, and a high comparative base in 2022, Poonpong Naiyanapakorn, head of the ministry’s trade policy and strategy office, told a news conference.
Falling consumer prices, however, should not lead to deflation as the economy is still growing, he said, adding the ministry still forecast headline inflation at 1.0% to 1.7% in 2023.
In October, the core CPI was up 0.66% year-on-year, compared with a forecast 0.59% rise in the poll, and against September’s 0.63% increase.
In the January-October period, the headline CPI rose an average 1.60% year-on-year, with the core CPI up 1.41%.
In September, the Bank of Thailand (BoT) unexpectedly raised the key interest rate by a quarter point to 2.50%, the highest in a decade, saying growth and inflation should pick up next year. It will next review policy on Nov 29.
Last month, BoT Governor Sethaput Suthiwartnarueput said the current policy rate remained appropriate for the economy but the BoT was ready to adjust it if needed.