Ministry scales down headline inflation forecast to 1-1.7%
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Ministry scales down headline inflation forecast to 1-1.7%

The Commerce Ministry has trimmed its headline inflation forecast for this year to a range of 1-1.7%, with an average of 1.35%, as it expects headline inflation to dip in the final quarter of the year.

The previous projection was 1-2% with an average of 1.5%, estimated in July.

"The inflation trend in October and the entire fourth quarter is expected to remain subdued and may turn negative. This is because the prices of food, including meat, poultry, seafood and seasonings, as well as products in the energy category such as electricity and diesel, are decreasing. There may be a price drop in the gasoline group," said Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office.

"In addition, measures to reduce the cost of living by the Commerce Ministry align with manufacturers and shopping malls working to lower prices of goods throughout the year. These efforts are expected to keep prices in check. The baseline last year was at a high level, which may result in inflation remaining subdued or even turning negative."

However, he said it is essential to monitor increasing consumption demand related to the tourism sector recovery and export activities, the higher average income of farmers and workers, the impact of El Niño on agricultural products in several countries, and the baht depreciation, which may affect the expected inflation rate.

According to Mr Poonpong, the new projection is based on 2.5-3% GDP growth, Dubai crude oil prices at US$75-85 per barrel and a foreign exchange rate of 34.5-35.5 baht per dollar.

The ministry reported yesterday headline inflation, gauged by the consumer price index, rose by 0.3% year-on-year in September, slowing from a 0.88% rise in the previous month. Inflation eased because of lower energy prices stemming from government support measures and a reduction in food prices, including meat, fresh vegetables and seasonings, said the ministry.

Core inflation, which excludes volatile food and energy prices, rose by 0.63% year-on-year in September, decelerating from a 0.79% increase in August.

For the first nine months of 2023, headline inflation was 1.82% year-on-year, while core inflation averaged 1.50%.

He said compared with other countries, in August Thailand remained in the "low inflation" group and continued to post the lowest rate in Asean among the seven nations that reported their inflation (Laos, the Philippines, Singapore, Indonesia, Vietnam and Malaysia). Inflation rates in many countries around the world are trending lower, particularly in Europe such as the UK, Italy and Germany, said Mr Poonpong.

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