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2 Jun 2015

Thai Economy

May Core Inflation Unexpectedly Slowed to 0.94 Percent…Suggesting Weaker Domestic Demand (Economic Brief No.3560 Full Ed.)

คะแนนเฉลี่ย
The Consumer Price Index (CPI) for May dropped 1.27 percent YoY, continuing from the contraction of 1.04 percent YoY reported for April due to declines in domestic retail oil prices and the electricity rate by 17.4 percent YoY and 4.9 percent YoY, respectively. The electricity rate fell in line a THB9.35 satang/unit drop in the electric power “Ft” charge to THB49.61 satang/unit for May-August.
However, it is notable that May Core Inflation slowed steeper-than-expected to 0.94 percent YoY, which may imply that domestic spending remains fragile on a lack of any new stimulus, though product prices have remained low over recent months.

For 2015, since inflation and household spending may exhibit some further softening in the coming months, we at KResearch assess that the average Headline Inflation rate will likely be lower-than-expected at 0.5 percent or may lean towards the lower end of our forecast range of 0.0-1.0 percent.

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Thai Economy