Thailand Inflation March 2021


Thailand: Consumer prices continue to fall in annual terms in March

April 7, 2021

Consumer prices rose 0.23% over the previous month in March, contrasting February's 0.91% fall. March's jump was the sharpest increase in prices since August 2020. The bounce back in price pressures was primarily driven by a strong rise in transport prices. Moreover, a softer drop in prices for food and non-alcoholic beverages and rising price pressures for housing and furnishing also contributed to the monthly increase.

In annual terms, consumer prices fell 0.1% in March, following February’s 1.2% fall. While March’s reading was the softest drop since February 2020, it still marked the 13th consecutive month of falling prices. Meanwhile, the trend was unchanged with the annual average variation of consumer prices coming in at February's minus 1.1% in March, and core inflation ticked up to 0.1% from the previous month's flat reading.

Regarding the outlook, Devin Harree, economist at Credit Suisse, commented:

“Base effects from last year’s plunge in energy prices and the subsequent commodity price recovery lead us to expect annual CPI inflation of 0.9% in 2021 (from -0.8% in 2020). In our view, yoy inflation will experience only a transitory jump, peaking within the Bank of Thailand’s (BoT) 1% -3% target range in Q2 21, before falling to the bottom of the range in Q4 21. In line with our view that output will take until Q1 22 to surpass pre-Covid levels, sizable spare capacity and labour market slack are likely to keep underlying price pressures contained through 2021 and 2022.”

FocusEconomics Consensus Forecast panelists see inflation returning in 2021, with consumer prices rising 1.1%, which is up 0.1 percentage points from last month’s forecast, while in 2022 panelists predict average inflation of 1.2%.

Author:, Economist

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Thailand Inflation Chart

Thailand Inflation March 2021 1

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

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