Thailand: Inflation remains steady in August
September 1, 2012
In August, consumer prices rose 0.40% over the previous month, which was a notch above the 0.35% increase recorded in July. The reading was mainly the result of higher prices for transportation and communication as well as for alcoholic beverages and tobacco. Meanwhile, annual headline inflation mirrored July's 2.7% increase, which was also in line with market expectations. The core inflation index, which smoothens energy and fresh food prices added 0.17% over the previous month (July: +0.03% month-on-month), which drove annual core inflation to 1.8% in August. At the current level, core inflation remains well within the Central Bank's 0.5%-3.0% target range. Annual average inflation continues its downward trajectory, inching down from 3.4% in July to 3.3% in August, its lowest level since April 2011. The Commerce Ministry expects inflation to average 3.3% this year and 3.5% next year. The Bank of Thailand projects inflation average 2.9% this year and 3.4% in 2013.
Author: Ricardo Aceves, Senior Economist