Thailand: Inflation falls to lowest level in more than two years
May 3, 2012
In April, consumer prices added 0.42% over the previous month, which followed on the 0.59% increase observed in March. The monthly rise reflected higher prices for food and non-alcoholic beverages, which were partially offset by lower prices for clothing and footwear. Despite the monthly increase, annual inflation dropped from 3.4% in March to 2.5% in April, returning to levels not seen since November 2009. The reading undershot market expectations that had inflation falling to 2.9% and mainly reflected a high base of comparison, as inflation reached 4.0% in the same month last year. The core inflation index, which smoothens more volatile categories such as fresh food and fuel, rose a more subdued 0.10%, which was down from the 0.33% increase registered in March. Consequently, annual core inflation fell from 2.8% in March to 2.1% in April, thereby remaining well below the upper limit of the Central Bank's 0.5%-3.0% target range. Annual average inflation fell to 2.8% in April from 3.9% in March. The Bank of Thailand expects inflation to average 3.4% this year.
Author: Ricardo Aceves, Senior Economist