Thai June inflation hits 14-year high as rate hike looms


BANGKOK: Thailand’s headline inflation outstripped forecasts to hit a close to 14-year high in June, reinforcing expectations of a rate hike as early as subsequent month, as the commerce ministry warned worth pressures will prolong into the third quarter.

The headline shopper worth index (CPI) rose 7.66% from a yr in the past, pushed up by increased power costs and in addition affected by base results, the ministry stated on Tuesday.

The determine beat a forecast 7.50% rise in a Reuters ballot and in contrast with May’s 7.10% rise.

The CPI within the present quarter is predicted to rise at an analogous tempo as the second quarter’s 6.46%, ministry official Ronnarong Phoolpipat instructed a information convention.

Prices, nonetheless, ought to fall sharply within the ultimate quarter of the yr resulting from final yr’s high comparative figures, he stated, including that 2022 common inflation was anticipated at 4.5%. In 2008, inflation was 5.5%.

The Bank of Thailand (BOT), nonetheless, expects 2022 headline inflation of 6.2%, above its goal vary of 1% to three%.

The BOT is predicted to begin elevating its benchmark curiosity rate from a report 0.50% on the subsequent assembly of its Monetary Policy Committee (MPC) on Aug. 10, to comprise rising costs, economists stated.

“The MPC wants to regulate financial coverage in a well timed method”, with the primary hike in August and one other rise within the ultimate quarter of the yr, stated Poonyawat Sreesing, a Siam Commercial Bank economist.

Krung Thai Bank’s Phacharaphot Nuntramas additionally predicted two hikes this yr from August of 25 foundation factors every, as a result of “the economic system isn’t but robust”.

Last week, the BOT stated financial coverage tightening can be performed so it didn’t impede the restoration of Southeast Asia’s second-largest economic system.

In June, the core CPI index, which strips out power and recent meals costs, rose 2.51% from a yr earlier, additionally beating a forecast 2.37% rise, and in contrast with May’s 2.28% enhance. – Reuters

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