Headline inflation in May jumps to 1.49%, the highest level in 16 months, driven by rising oil prices
May’s reading of 1.49% reflects pricier oil but stays within Commerce Ministry’s target range
Headline inflation in May registered 1.49% on an annual basis, the highest level in 16 months, driven by rising oil prices.
Commerce Ministry reported yesterday that the consumer price index (CPI) rose by 0.56% month-tomonth from April, an 11th straight increase.
Oil prices leapt 7.7% in May, hitting their highest point in 13 months, while prices of packed rice, lemon, onion and long bean jumped amid higher temperatures.
The retail costs of livestock products such as poultry, eggs, pork, vegetable oil and sugar were down, but on a monthly basis they rose 0.56% from April.
Headline inflation was 0.89% for the first five months, remaining in the Commerce Ministry’s target range of 0.7-1.7 for 2018.
According to Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, core inflation (which strips out raw food and energy prices) was 0.80% year-on-year and 0.17% month-to-month in May.
For the first five months, core inflation averaged 0.66%.
Of the 422 products and services used to calculate the CPI, prices rose for 231 items, including milled rice (+2%), fresh vegetables (+5.5%) and processed food (+0.4%).
Price were unchanged for 72 items, while 119 saw prices drop, including vegetable oil, pork, eggs and seasonings.
Ms Pimchanok said headline inflation could edge up in June because of a year-on-year low-base effect.
Prices of goods and services are expected to increase gradually in line with rising energy prices.
Meanwhile, accelerating factors for inflation will be driven by government stimulus spending, while provincial buyers will enjoy higher income to improve their purchasing power.
“The Commerce Ministry expects an inflation rate of nearly 1% throughout 2018, in line with the country’s GDP growth, as well as the pickup in farm product prices and increasing farmer income,” Ms Pimchanok said.
The ministry will adjust its assumed oil price to a range of US$65-75 a barrel because Dubai crude has risen to more than $65 a barrel now. Higher oil prices are tipped as the main factor boosting inflation.
The ministry’s annual inflation target is based on economic growth of 3.6-4.6% and an exchange rate of 32-34 baht to the US dollar.
Ms Pimchanok said the ministry will review its inflation outlook at the end of June.