The country's rate of inflation last month plunged to a 21-month low attributed to decreasing fuel prices and electricity bills as well as a high price base in May last year, with the rate expected to continue easing in June.
According to Wichanun Niwatjinda, deputy director-general of the Trade Policy and Strategy Office, inflation in June is expected to continue slowing or even contract following a drop in energy prices, particularly fuel prices, which are dipping significantly from May 2022.
Electricity bills are also falling, attributed to government support measures.
A high price base in June 2022, government measures to lower the cost of living, and price controls all make it likely inflation will ease in June.
However, weather fluctuations, a recovery in demand and high production costs (such as liquefied petroleum gas, wages and interest rates) are adverse factors in terms of inflation expectations and they should be monitored, Mr Wichanun said.
"The inflation rate is trending downwards. In the first quarter, inflation was 3.88% and it is expected to be slightly above 1% in the second quarter. For the third and fourth quarters, the average is projected to be less than 1% a month. This indicates a likely decrease in inflation throughout the year, with a clearer picture expected in June," he said.
"The central bank's inflation target will be reconsidered next month, and there is a possibility of a downward adjustment."
The Commerce Ministry recently downgraded its headline inflation outlook for this year from a range of 2-3% to 1.7-2.7%, in line with economic conditions and falling energy prices.
Yesterday the ministry reported headline inflation, gauged by the consumer price index (CPI), was 0.53% year-on-year in May, decelerating for five consecutive months following a 2.67% rise in April.
Mr Wichanun said inflation in May was the result of a 3.99% year-on-year uptick in the prices of food and non-alcoholic beverages, with prices rising for vegetables and fruit (limes, spring onions, eggplants, watermelon and rambutan) as well as eggs, following bad weather and strong demand attributed to the new school semester.
Prices for non-alcoholic beverages (hot and cold coffee and tea, soft drinks and instant coffee) and prepared food, meal boxes and noodles increased because of high costs, according to the ministry.
However, the prices of pork, snakehead fish, vegetable oil, tamarind sauce, shredded/dried coconut, banana, durian, and rose apple declined.
Core inflation, which excludes volatile food and energy prices, was 1.55% year-on-year in May, decelerating from 1.66% in April.
On a monthly basis, the CPI fell 0.17% from the previous month, largely attributed to a 1.59% drop in non-food and beverage prices as rates for diesel, gasohol, gasoline and electricity, along with cleaning supplies such as detergent, softener and toilet cleaner, all decreased.
However, the prices of specific items such as facial foam, body powder and soap all increased.
In terms of the five-month average, the CPI rose by 2.96% from the corresponding period in 2022.