Thai Inflation Turns Positive for First Time in Seven Months

(Bloomberg) -- Thailand’s inflation turned positive for the first time in seven months after the government allowed oil retailers to raise diesel price and fresh food and vegetables turned more expensive due to a searing heat wave.

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The consumer price index rose 0.2% in April, the first monthly gain since September, according to data released by the Commerce Ministry on Friday. That beat the analysts expectation for a 0.2% decline.

Core inflation stood at 0.37%, unchanged from March, while consumer prices quickened 0.85% month-on-month, the fastest pace since June 2022.

The uptick in inflation is in line with the Bank of Thailand’s forecast that inflation will return to within its target range of 1% to 3% by the end of the year. The string of negative prints had prompted Prime Minister Srettha Thavisin to argue that it pointed to a weak demand and call for an immediate rate cut.

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While the central bank has held its benchmark rate steady at a decade high 2.5% for three straight meetings, Friday’s price print effectively lowers the inflation-adjusted real interest rate to 2.31%.

Inflation may further quicken to a range of 1% to 1.5% this month on rising fuel and food costs, the commerce ministry said.

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