Thailand: Inflation falls to 10-month low
February 2, 2012
In January, consumer prices added 0.39% over the previous month, which contrasted the 0.48% fall seen in December. The monthly rise was mainly the result of higher prices for housing and energy. Despite the monthly jump, annual headline inflation inched down from 3.5% in December to 3.4% in January, which was in line with market expectations. The annual reading marked the lowest level observed since March 2011. The core inflation index, which smoothens more volatile categories such as fresh food and fuels, rose 0.26% in December over the previous month, which was above the 0.11% increase tallied in November. As a result, annual core inflation remained unchanged at December's 2.7%, which remains within the Central Bank's 0.5%-3.0% target range. In January, the Bank of Thailand revised its projections for this year and now expects inflation to average 3.2%, which is below its previous 3.5% estimate. For 2013, the Bank sees inflation moderating to 2.9%.
Author: Ricardo Aceves, Senior Economist