Inflation grew less than expected at 0.62% YoY in June 2024, but it is projected to accelerate during 2H24…KResearch maintains inflation forecast for 2024 at 0.8% (Business Brief No.4070 Full Ed.)

• Thailand's headline inflation came in lower than expected at 0.62 percent YoY in June 2024, and reverted to negative territory for the first time in six months at (-)0.31 percent MoM because of the decline in power costs caused by diminishing effect of the low base in May 2023. Additionally, the prices of fresh vegetables and fruits fell over month because of the end of the extremely hot weather and there was more rainfall.
• In 2Q24, average headline inflation accelerated from 1Q24 to 0.78 percent YoY, while average core inflation remained steady at 0.38 percent YoY. As a result, average headline inflation in Thailand stood at 0.0 percent YoY, and average core inflation was at 0.41 percent YoY during 1H24.
• Looking ahead, it is expected that headline inflation will lean towards the MPC’s target range of 1-3 percent during the remainder of 2024. KResearch maintains our inflation forecast for 2024 at 0.8 percent in line with the low base of 4Q23 while the government has gradually floated domestic energy prices amidst high debt levels of the Oil Fund and the Electricity Generating Authority of Thailand (EGAT). Additionally, global crude oil prices are expected to remain high amid ongoing geopolitical tensions.