Thailand: Inflation eases in December
January 4, 2012
In December, consumer prices fell 0.48% over the previous month, which contrasted the 0.21% rise recorded in November. The monthly drop reflected declining prices for energy and food, particularly for fresh food, as floodwater receded in December. As a result, annual headline inflation fell from 4.2% in November to 3.5% in December, which was below market expectations that had inflation falling to 4.0%. Annual average inflation closed 2011 at 3.8%, above the 3.3% observed in 2010 and in line with the Central Bank's estimate. The core inflation index, which strips out volatile categories such as fresh food and fuel, rose 0.11% over the previous month, with annual core inflation dropping from 2.9% in November to 2.7% in December. Thus, core inflation closed 2011 within the Central Bank's 0.5%-3.0% target range. The Bank of Thailand expects inflation to average 3.5% this year.
Author: Ricardo Aceves, Senior Economist