Thai inflation rises more than expected to 2.53% in August, remains within central bank target
Headline CPI is expected to continue rising, says the Thai commerce ministry
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[BANGKOK] Thailand’s inflation accelerated more than expected in August but still remained within the central bank’s target range, giving policymakers little reason to shift course as they focus on supporting a slowing economy.
The consumer price index rose 2.53 per cent year on year from 1.95 per cent in July, accelerating for the first time in four months, commerce ministry data showed on Monday (Sep 7). That also exceeded the 2.43 per cent median estimate in a Bloomberg survey of economists.
The pickup is unlikely to significantly alter the Bank of Thailand’s policy calculus. The central bank kept its benchmark interest rate unchanged at 1 per cent for a third straight meeting in August, with inflation staying within the 1-3 per cent target range.
Bank of Thailand governor Vitai Ratanakorn said earlier in September that weakening growth, rather than price pressures, is Thailand’s main economic risk and that monetary policy remains accommodative.
On a monthly basis, consumer prices rose 0.56 per cent, reversing a 0.73 per cent decline in July and exceeding the median economist estimate for a 0.51 per cent increase. Core inflation accelerated to 1.44 per cent from 1.34 per cent.
Inflation may continue to accelerate in September, driven by higher prices of oil, food and transportation, according to Nantapong Chiralerspong, director-general of the commerce ministry’s Trade Policy and Strategy Office. The ministry expects price gains for the full year to average between 1.5 and 2.5 per cent, with the rate likely to accelerate to about 2.7 per cent in the fourth quarter.
“High oil prices amid Middle East tensions and El Nino, which is expected to intensify, will be key drivers of inflation late this year,” he said. BLOOMBERG
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