Thailand: Inflation rises to two-year high
June 2, 2011
In May, consumer prices added 0.34% over the previous month, which was well below the 1.38% price jump observed in April. The monthly rise reflected higher prices for food and beverages, which were partially offset by lower prices for transport and communication. As a result of the monthly rise, annual headline inflation rose from 4.0% in April to 4.2% in May, which was virtually in line with market expectations of a 4.3% rise. The reading represented the highest rate since September 2008. The core inflation index, which excludes more volatile categories such as fresh food and fuel, rose 0.46% over the previous month, pushing annual core inflation to 2.5% in May (April: 2.1% year-on-year). At the current level, core inflation remains within the Central Bank's target rate of 0.5% - 3.0%. Meanwhile, the Central Bank expects headline inflation will average 3.9% this year and 3.2% in 2012.
Author: Ricardo Aceves, Senior Economist