Thai Dec headline CPI rises 0.78% y-o-y, below forecast

[BANGKOK] Thailand's headline consumer prices rose again in December, but were below forecasts and the central bank's target range, commerce ministry data showed on Wednesday, giving policymakers room to keep interest rates low.

The headline consumer price index rose 0.78 per cent in December from a year earlier, after November's 0.99 per cent rise.

A Reuters poll projected an increase of 0.99 per cent in December.

The Bank of Thailand (BOT) expects headline inflation to be 1.1 per cent in 2018, compared with its one to four per cent target range.

The BOT has left its policy interest rate unchanged at 1.50 per cent since April 2015. The rate is just 25 basis points above the record low. It next reviews its monetary policy on Feb 14. Most economists expect no policy change throughout 2018, but some predict an interest rate hike in the second half of the year.

The core CPI index, which excludes raw food and energy prices, rose 0.62 per cent in December year-on-year, also below the poll's median forecast of 0.65 per cent increase.

In 2017, annual headline CPI rose 0.66 per cent and the core index increased 0.56 per cent.

Inflation in Thailand has been held down by state price controls, subsidies and soft domestic demand.

REUTERS