Thailand: Inflation moderates in June
July 4, 2011
In June, consumer prices rose 0.13% over the previous month, which was below the 0.34% increase observed in May. The monthly reading was mainly the result of declining prices for transport, owing to the government's subsidy program, which aims to reduce inflationary pressures from rising oil prices. As a result of the subdued reading, annual headline inflation edged down from 4.2% in May to 4.1%, which was in line with market expectations. The core inflation index, which excludes more volatile categories such as fresh food and fuel followed suit and moderated from a 0.46% increase in April to a 0.18% rise in May. Nevertheless, annual core inflation continued its upward trend and rose from 2.5% in April to 2.6% in May, which marked the highest rate since August 2008. At the current level, core inflation remains within the Central Bank's target rate of 0.5% - 3.0%. The Central Bank expects headline inflation will average 3.9% this year and 3.2% in 2012.
Author: Ricardo Aceves, Senior Economist