Thailand: Inflation rises to four-year high
September 2, 2011
In August, consumer prices climbed 0.43% over the previous month, which more than doubled the 0.18% rise recorded in July. The monthly jump was mainly the result of higher prices for food and beverages, which jumped 1.66% over the previous month (July: -0.20% month-on-month). As a result, annual headline inflation rose from 4.1% in July to 4.3% in August, the highest level since September 2008. The reading contrasted market expectations that had inflation moderating to 4.0%. The core inflation index, which excludes more volatile categories such as fresh food and fuel jumped from 0.08% in July to 0.27% in August. Annual core inflation rose to 2.8% (July: 2.6% year-on-year), which marked a three year high. Nevertheless, at the current level, core inflation remains within the Central Bank's target range of between 0.5% and 3.0%. The Central Bank expects headline inflation will average 3.9% this year and 3.2% in 2012.
Author: Ricardo Aceves, Senior Economist