Inflation Accelerates On Food And Energy Prices

Economic Research	02 December 2016
Thailand
Economic Highlights
Inflation Accelerates On Food And Energy Prices Thailand’s consumer price index (CPI) rose 0.6% YoY in November, accelerating from a 0.3% climb a month earlier, boosted by a sharp increase in price of vegetables, as well as a smaller contraction in energy costs. Going forward, we expect CPI to accelerate and grow +1.0% in 2017, from an estimated rise of +0.5% this year, on increasing domestic consumption and rising energy inflation. Despite a pick-up, inflation remains tame in our view – we therefore believe that the central bank will likely keep its key policy rate stable at 1.5% in 2017. Fresh food price inflation was responsible for most of the upside, led by surging vegetables & fruits prices, which more than offset a decline in rice prices. Cost of housing rent and health & personal care slowed. The weakness capped some of the upside in inflation. Core CPI grew 0.8% YoY in November. Core inflation remained stable, unchanged for the fifth consecutive month. Economist:  Ng Kee Chou  | +603 9280 2179