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Thai January consumer prices fall for 13th straight month

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Thailand's annual headline consumer prices dropped for a 13th consecutive month in January due mainly to lower oil prices, giving the central bank leeway to keep interest rates low to help the flagging economy.

[BANGKOK] Thailand's annual headline consumer prices dropped for a 13th consecutive month in January due mainly to lower oil prices, giving the central bank leeway to keep interest rates low to help the flagging economy.

The index, published by the Commerce Ministry on Monday, fell 0.53 per cent in January from a year earlier, compared with a Reuters poll forecast for a 0.49 per cent dip.

The core inflation rate, which strips out raw food and energy prices, was at 0.59 per cent in January, in line with the 0.60 per cent seen in the poll.

Consumer prices have also been held down by government price controls and sluggish spending since an army coup in May 2014 ended months of political unrest.

The Bank of Thailand is forecasting headline inflation at 0.8 per cent this year, below the 1.0-4.0 per cent target range, and core inflation at 0.9 per cent.

Central bank Governor Veerathai Santiprabhob told Reuters on Jan 19 that there was no need to cut interest rates as fiscal spending was supporting the economy.

After surprise cuts in March and April last year, the BOT's monetary policy committee has kept the benchmark interest rate unchanged at 1.50 per cent. It next reviews policy on Feb 3, and most economists expect no change for now.

REUTERS