Krungthai COMPASS pointed out that inflation in May 2023 slowed down from lower energy prices.

Bangkok, June 7 – Krungthai COMPASS analyzes headline inflation in May 2023 at 0.53%, the lowest in 21 years, from falling energy prices, which may lead the MPC to keep interest rates at the meeting in August. Mar. 2023

Mr. Channithis Chaisingthong, Krungthai COMPASS analyst, revealed that headline inflation in May rose by 0.53%YoY. Slowed from the previous month's growth of 2.67%YoY, lower than the analyst's expectation of 1.7%, the lowest in 21 months from energy prices. That returned to shrink for the first time in 27 months at -9.55%YoY following a drop in fuel prices and lower electricity prices from the Ft reduction in May-August 2023. While the fresh food category grew 4.70%YoY. Decelerated from April at 5.50%YoY due to lower pork prices.

Core inflation moderated slightly at 1.55%YoY, compared to 1.66%YoY in the previous month as the price of cooking ingredients returned to shrink in line with vegetable oil prices. and a slowdown in public fare prices. non-alcoholic beverages, etc. However, the prices of some product categories accelerated, such as clothing and footwear. and the category of medical treatment and personal services, etc.

Krungthai COMPASS estimates that inflation is likely to continue to slow down. from energy prices which are quite much lower than the previous year. In particular, oil prices dropped from the global economic slowdown. Most recently, the price of Dubai crude oil still swings below the level of 80 dollars per barrel. Although Saudi Arabia has decided to reduce oil output by 1 million barrels per day since July 2023, it accounts for just 1% of global oil production. Therefore, the impact is expected to be limited amid a slow recovery in global oil demand. In addition, the base effect of the high retail oil price last year. Therefore, it is estimated that such factors will cause inflation to remain low and there is a chance of being negative in June, which may be a factor supporting the MPC to maintain the policy rate at the August meeting. 2023 after all consecutive interest rate hikes of 150bps to level 2.

Source: Thai News Agency