Krungthai expects inflation to accelerate to within the target range in Q4/67.


Bangkok, Krungthai Bank said the inflation rate in June 2024 was 0.62%, slowing down after the low electricity base effect ended and fresh food prices adjusted down. It expects inflation in Q3/2024 to be below 1%, with a tendency to accelerate into the target range in Q4/2024.

Krungthai COMPASS, Krungthai Bank, revealed that the general inflation rate in June 67 expanded by 0.62% YoY, growing at a slower rate than the previous month at 1.54% YoY and lower than analysts’ expectations of 1.1% from the energy category that expanded by 2.43% YoY, slowing down from the previous month at 7.15% YoY due to the impact of the low electricity base last year ending, coupled with the price of fresh food category growing by only 0.19% YoY, slowing down from 1.51% YoY in the previous month, following the price of meat that contracted and the price of fresh vegetables that slowed down due to the weather conditions becoming more favorable for planting after the hot weather ended.

For the core inflation rate, it was at 0.36
%YoY, steady from the previous month’s 0.39%YoY. The prices of goods that contracted and decreased were in the categories of clothing and shoes, washing and cleaning equipment, and personal items. The prices of goods that expanded were in the categories of beverages and public transportation fares. The general inflation rate for the first 6 months of the year was at 0.0%YoY, while the core inflation rate was at 0.41%YoY.

Krungthai COMPASS expects the inflation rate in Q3 to be below 1%, which is the lower bound of the inflation target range, and tends to accelerate into the inflation target range in Q4, partly due to the low base in the previous year. This is consistent with the view of the Ministry of Commerce, which estimates that the inflation rate in Q3 will be close to Q2, which was 0.78% YoY. The inflation rate tends to remain low due to fresh food prices, especially fresh vegetable prices, which have decreased after the end of the hot season, electricity rates that tend to be lower than the previous y
ear, and retail gasoline prices, which had a high base in the previous year. However, the inflation rate in Q4 is expected to accelerate and enter the inflation target range due to the energy price base, both electricity rates and retail oil prices, which have decreased. Meanwhile, the core inflation rate tends to remain low, close to the first 6 months of the year at 0.4%, which is lower than the average growth before COVID-19 (2017-2019) of 0.6%, reflecting that consumer purchasing power is still weak. Consistent with the Consumer Confidence Index (next 3 months) which was revised down to 57.5 in June from 57.9 in the previous month.

Source: Thai News Agency

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