Inflation In April Falls 2.99%, Facing Risk of Deflation if May still Remains Negative

Trade Policy and Strategy Office, Ministry of Commerce revealed the consumer price index (CPI) in April has fell by 2.99% from the same period of last year and decreased 2.03% QoQ, the largest contraction in more than 10 years due to the decline in energy-related goods’ prices, particularly oil prices that have dropped to the lowest level in more than 11 years.

 

Meanwhile, the core consumer price index (Core CPI) in April rose 0.41% YoY, but slightly dropped 0.07% QoQ.

 

Even in April has posted a inflation rate of negative, but Thailand still not entering to deflation stage because to get into deflation according to the academic definition, inflation must be negativity for 3 consecutive months or 1 quarter, aligns with the decrease in consumption goods prices. But currently, the inflation is remain negative for 2 months, while consumer product prices unchanged yet.

 

Inflation in the second quarter of 2020 expected to contract by 2.28% due to the lack of upward trend in oil prices. In the 3rd and 4th quarters, inflation should be improved, if the domestic economy starts to recover despite not yet to its normalize.

 

TPSO still maintains its prediction of 2020 inflation rate at -1.0% to -0.2%.