Wednesday, February 15, 2017

Rising Demand To Reinforce Ongoing Reflation Climb

Economic Research
15 February 2017
Thailand

Economic Update




Thailand’s CPI grew 0.2% in 2016, rebounding from a 0.9% fall the year before. The reversal was driven mainly by a sharply slower decline in energy prices, as well as higher food costs. Core CPI slowed to +0.7%, as consumers remained wary of the volatile external demand.
Going forward, we envisage for inflation to rise 1.5% in 2017, compared to +0.2% last year, underpinned by:
    i.   Higher food and energy prices;
   ii.   A pick-up in discretionary spending as consumer confidence grows in line with the expanding economy.
The small rise in inflation is not expected to dampen consumer spending and will likely be beneficial for private investment, thus we expect the Bank of Thailand’s (BOT) to maintain its key policy rate at 1.5% in 2017.


Economist:  Ng Kee Chou  | +603 9280 2179

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