Thailand Inflation October 2019


Thailand: Inflation falls to over two-year low in October

November 1, 2019

Thai consumer prices fell 0.16% month-on-month in October, swinging from the 0.10% price increase registered in September. The latest print was driven by lower prices for food; transportation and communication; and vehicles and vehicle operation. Analysts at Goldman Sachs also pointed to the effects of a stronger Thai currency on inflationary pressures.

Inflation, meanwhile, ticked down to 0.1% in October from 0.3% in the prior month, marking the lowest print since June 2017. Moreover, inflation moved further south of the Central Bank’s target range of 1.0%–4.0%; inflation came in below the lower bound for the fifth month running in October. Core inflation, on the other hand, was stable at September’s 0.4% increase in October.

The string of weak inflation data provides ammunition for the Bank of Thailand to ease credit conditions; however, Goldman Sachs’ analysts noted that they “continue to expect the Bank of Thailand to keep policy rates unchanged at the meeting next week” owing to “financial stability and policy space concerns.” Yet the analysts also point out that the balance of risks is tilted “to the dovish side.”

Going forward, FocusEconomics Consensus Forecast panelist see inflation picking up slightly and returning to target; however, inflation is seen remaining relatively muted. The panel expects inflation to average 1.2% in 2020, which is unchanged from last month’s forecast. For 2021, panelists predict average inflation of 1.4%. The Bank of Thailand, meanwhile, foresees inflation averaging 1.0% in 2020.

Author:, Economist

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Thailand Inflation Chart

Thailand Inflation October 2019

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

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