Thailand Inflation July 2017

Thailand

Thailand: Inflation accelerates in July

August 2, 2017

In July, consumer prices decreased 0.13% in monthly terms, the lowest reading in four months (June: +0.02 month-on-month). The drop was driven by lower prices for food and non-alcoholic beverages, transportation and communication, as well as raw food and energy which offset higher prices for subcategories such as recreation and education, and apparel and footwear. Core consumer prices, excluding energy and fresh food, were steady at the previous month’s 0.08% increase–the highest print in 13 months.

Inflation came in at 0.2% in July, contrasting the previous month’s 0.1% fall in consumer prices. Although inflation returned in July, it remains far below the Central Bank’s target range on 1.0%-4.0% for the fifth consecutive month. Inflation has been confined due to state price controls, sluggish domestic demand and subsidies. Moreover, July’s results gave the Central Bank room to keep its interest rates low at its next monetary policy meeting scheduled for 16 August: and analysts are not expecting a change to the interest rate. Furthermore, core inflation was also steady at June’s print of 0.5%.

The Bank of Thailand foresees inflation of 0.8% in 2017 and 1.6% in 2018. FocusEconomics Consensus Forecast panelists expect inflation of 1.0% on average in 2017, which is down 0.2 percentage points from last month’s forecast. For 2018, panelists predict average inflation of 1.6%.


Author:, Economist

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Thailand Inflation July 2017

Note: Annual and monthly variation of consumer price index in %.
Source: Ministry of Commerce and FocusEconomics calculations.


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