CPI Softens In April On F&B Prices

Economic Research	3 May 2017
Thailand
Economic Update
CPI Softens In April On F&B Prices Thailand’s inflation unexpectedly slowed to 0.4% YoY in April, dragged by a drop in fresh food costs while utility bills remained in contraction. Going forward, we maintain our forecast for 2017 CPI to gain 1.5% compared to +0.2% in 2016. This is underpinned by an increase in the power tariff rate for May-August, rising private consumption on the back of higher commodity prices and farm income, elevated imported inflation from a softer THB, and a rise in energy costs. Food & beverage (F&B) prices contracted 0.3% YoY. This was led by a drop in the cost of vegetables & fruits, probably on account of better harvesting due to good weather conditions. Prepared food prices eased to +1.1% YoY in April from +1.6% in the month before. Consumer spending continued to be sluggish, as evidenced by the slowdown in core Consumer Price Index (CPI), and muted recreation and education price inflation. Economist:  Ng Kee Chou  | +603 9280 2179