CPI Stalled On Food And Petrol Prices; Core CPI Stable

Economic Research	2 June 2017
Thailand
Economic Update
CPI Stalled On Food And Petrol Prices; Core CPI Stable Thailand’s headline inflation stalled in May, retreating from a 0.4% gain the month before. The price weakness was driven mainly by a drop in fresh food and petrol prices, which outweighed an increase in utility bills. Going forward, we maintain our forecast for 2017 CPI to gain 1.5% vs +0.2% in 2016. This is underpinned by:     i.   Higher power tariffs until August due to the lagged impact of higher fuel prices;    ii.   Rising private consumption on the back of higher commodity prices and farm income;   iii.   A retreat in YTD THB strength;   iv.   Higher energy costs. As the CPI is expected to remain manageable, and with economic growth prospects still moderately positive, we do not expect the BoT to alter the policy rate in 2017. Economist:  Ng Kee Chou  | +603 9280 2179
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