Thailand Inflation


Thailand: Inflation remains stable in January

February 2, 2011

In January, consumer prices rose 0.55% over the previous month, which was above the 0.09% increase observed in December. The January increase was mainly the result of higher prices for food and beverages, especially for fruits and vegetables as a result of the recent adverse weather conditions that hit the country at the start of this year. Annual inflation remained unchanged at 3.0% in January, which was in line with market expectations. At the current level, inflation sits within the Central Bank's target rate of 0.5% - 3.0%, which is based on quarterly average core inflation (the current quarterly average is 1.3%). The core inflation index, which excludes fresh food and fuel prices, rose a more moderate 0.19% over the previous month (December: 0.39% month-on-month). As a result, annual core inflation was unchanged at 1.4% in January, which, nevertheless, represents the highest reading since March 2009. The Commerce Ministry left its projections for this year unchanged at an inflation rate of between 3.2% and 3.7%. Meanwhile, the Central Bank expects headline inflation to remain between 2.5% and 4.5% this year and between 2.0% and 4.0% for next year.

Author:, Senior Economist

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