Thailand: Inflation increases in December
January 5, 2011
In December, consumer prices rose 0.09% over the previous month, which came in below the 0.28% increase registered in November. The December reading mainly reflected higher prices for transport and communications, as well as for housing and furnishing, which, were partially offset by lower prices for food and beverages. As a result of the marginal increase in consumer prices, annual inflation stepped up from 2.8% in November to 3.0% in December, exactly in line with private sector analysts' expectations. At the current level, inflation remains within the Central Bank's target range of 0.5% - 3.0%, which is based on quarterly average core inflation (the current quarterly average is 1.2%). The core inflation index, which smoothes out more volatile categories such as raw food and energy prices, jumped 0.39% over the previous month, contrasting the flat figure observed in November. As a result, annual core inflation climbed to 1.4% in December from 1.1% in November. The Central Bank expects headline inflation to remain between 3.0% and 5.0% this year.
Author: Ricardo Aceves, Senior Economist