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Thailand's Inflation Slows Down in May

Thailand's inflation growth eased in May despite fuel and commodity prices remaining high due to the war in Iran.The consumer price index rose 2.79% year on year, a slowdown from the 2.89% growth in April, according to data from the Trade Policy and Strategy Office.The reading missed the Bloomberg-surveyed analysts' median estimate of 3.1%.On a month-on-month basis, the CPI inched 0.17% higher.The major contributor to the rise in inflation was the oil price hikes, which were triggered by the Middle East war and the closure of the Strait of Hormuz. The situation is still surrounded by uncertainty as the U.S. and Iran have yet to strike a deal.The increase in fuel prices led to the rise in public transport fares, while the cost of living climbed as enterprises passed on increased costs to consumers. The prices of fresh vegetables also rose from a year earlier due to a low price base effect.A survey posted by S&P Global earlier this week showed that enterprises passed on rising manufacturing costs to consumers, leading to higher factory gate charges. This was in line with the country's manufacturing activity slowing down amid vulnerable consumer confidence over the ongoing conflict in Iran. The headline S&P Global Thailand Manufacturing Purchasing Managers' Index slipped to 52.6 in May from 52.7 in April.Thailand's trade deficit also widened $10 billion in April from $3.04 a year earlier as exports lagged behind imports, according to official data.The Bank of Thailand maintained its stance that it will not adjust its monetary policy due to the expected rise in inflation, as the increase could be temporary."This is because monetary policy is a demand-side tool, and therefore has limited ability to address supply-side problems," BOT Governor Witai Rattanaporn said in a press conference on Thursday, a day before the inflation rate data is released.The central bank kept benchmark rates at 1% at the end of April.