Thailand: Inflation declines in February
March 2, 2011
In February, consumer prices added 0.37% over the previous month, which was below the 0.55% increase tallied in January. The February rise mainly reflected higher prices for housing and furnishing, as well as for food and beverages. Annual inflation fell from 3.0% in January to 2.8% in February, which was in line with private sector analysts' expectations. The core inflation index, which strips more volatile items from the consumer price index, rose a more moderate 0.10% over the previous month, leaving annual core inflation unchanged at 1.4% in February (January: 1.4% year-on-year). At the current level, core inflation sits within the Central Bank's target rate of 0.5% - 3.0%. The Commerce Ministry sees inflation increasing in the months ahead, as several government subsidies, which helped to counter increases in food and fuel prices, will expire at the end of March. Accordingly, the Ministry expects inflation to reach between 3.2% and 3.7% this year. Meanwhile, the Central Bank expects headline inflation to remain between 2.5% and 4.5% this year and between 2.0% and 4.0% next year.
Author: Ricardo Aceves, Senior Economist