Thailand: Inflation continues to moderate in October
November 2, 2010
In October, consumer prices remained unchanged over the previous month, which contrasted the 0.09% price drop observed in September. The October reading mainly reflected higher prices for transports and communications, which were offset by lower prices for food and beverages, as government subsidies helped containing inflationary pressures. As a result of the subdued reading, annual headline inflation fell from 3.0% in September to 2.8% in October, undershooting market expectations, which had inflation remaining stable at 3.0%. At the current level, inflation remains within the Central Bank's target range of 0.5% - 3.0%, which is based on quarterly average core inflation (the current quarterly average is 1.1%). The core inflation index, which excludes unprocessed food and energy prices, rose 0.10% over the previous month. Annual core inflation remained unchanged at September's 1.1%. The Central Bank expects headline inflation to stay between 2.8% and 3.8% this year. For 2011, the Bank expects inflation to average between 3.0% and 5.0%.
Author: Ricardo Aceves, Senior Economist