© Reuters. Skyscrapers are photographed against the setting sun in Bangkok, Thailand, January 4, 2023. REUTERS/Athit Perawongmetha/File Photo
By Orathai Sriring and Kitiphong Thaichareon
BANGKOK (Reuters) -Thailand’s annual headline consumer inflation rate fell to its lowest in 35 months in January, data showed on Monday, and the commerce ministry said it expected price pressures to ease further in the first quarter.
The headline consumer price index (CPI) fell 1.11% in January from a year earlier, the commerce ministry said, versus a forecast drop of 0.82% in a Reuters poll, and against December’s 0.83% fall.
The decline in January was the fourth in as many months and was driven by government energy subsidies, lower food prices, and a high base effect from last year, the ministry said.
It was the ninth straight month that headline inflation was below the central bank’s target range of 1% to 3%.
Despite lower inflation and government pressure on the Bank of Thailand (BOT) to ease policy, it is expected to leave its policy rate unchanged at a more than decade-high of 2.50% on Wednesday, a Reuters poll showed.
BOT Governor Sethaput Suthiwartnarueput recently told Reuters the current policy rate was ‘broadly neutral” and negative headline inflation was not a concern or deflation.
The central bank left its key rate steady at its November review, having raised it by 200 basis points since August 2022 to curb inflation.
The commerce ministry predicted headline CPI would fall 0.7% year-on-year in the first quarter, with government measures to lower living costs the main factor.
“There is still no deflation yet as the core rate remains positive,” Poonpong Naiyanapakorn, head of the ministry’s trade policy and strategy office, told a briefing.
The core CPI, which stripe out fresh food and energy prices, rose 0.52% year-on-year in January, versus a forecast rise of 0.57%.
For 2024, the ministry maintained its forecast for headline inflation at between -0.30% and 1.7%, after last year’s 1.23%.
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