The Commerce Ministry is maintaining its 2023 forecast for average headline inflation in a range of 1.7-2.7%, after cutting it last month from 2-3%.
According to Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office, Thailand's inflation rate is expected to start falling for the remainder of the year.
"The inflation trend for May is expected to significantly decelerate to around 1% or slightly above because of a high-price base in May 2022 and lower fuel prices year-on-year. The prices of goods and services are stabilising and some items are even decreasing in price," said Mr Poonpong.
"Additionally, the electricity tariff for May to August this year has been reduced to 4.70 baht per unit, which may help keep inflation low in May."
The ministry reported yesterday headline inflation, gauged by the consumer price index (CPI), was 2.67% in April, falling from 2.83% in March.
The rate declined for the fourth consecutive month and is the lowest rate in 16 months, mainly because of a deceleration of energy and food prices, as well as a high-price base in April 2022.
Core inflation, which excludes volatile food and energy prices, was 1.66% year-on-year in April, decelerating from 1.75% in the previous month.
On a monthly basis, the CPI rose by 0.19% in April from the previous month, largely because of a 0.34% uptick in food and non-alcoholic beverages, notably for fresh vegetables (coriander, spring onion and Chinese kale), fresh fruit (rambutan, mangosteen and tangerine) as well as eggs.
Another contributor was 0.08% growth in non-food and beverages as prices of gasoline and personal goods and care slightly increased, including body powder, skin protection and skincare, and haircuts.
In the first four months of 2023, headline inflation was 3.58% year-on-year, with core inflation for the period at 2.09%.
"Although the inflation rate is expected to decelerate and stay within the target range, there are adverse factors that could accelerate the inflation rate such as the high price of cooking gas, which is a significant production cost, severe drought affecting the quantity and price of agricultural products, increased consumer demand from tourism, and the government's stimulus measures," said Mr Poonpong.
"These factors may significantly affect the inflation rate and should be closely monitored."