Thai headline inflation accelerated in November for the first time in four months; however, marginally. On a year-on-year basis, the consumer price inflation came in at 0.21 percent, an acceleration from October’s 0.11 percent. Sequentially, the headline CPI fell 0.13 percent in the month after falling 0.16 percent in the prior month. Prices of food dropped 0.35 percent sequentially, with vegetables and fruits recording the steepest fall. On the contrary, energy prices rose 0.14 percent after falling 1.10 percent in October.
Most other major non-food categories saw prices rise for some or remain broadly unchanged in sequential terms, with personal and medical care as the main exception. Accordingly, core inflation rose 0.03 percent sequentially in the month. On a year-on-year basis, core inflation rose to 0.47 percent.
According to the Commerce Ministry, Thai inflation is likely to accelerate further in December, underpinned by government stimulus designed to strengthen consumer spending and a bolstering tourism sector. Base effects are also set to turn more favourable.
“Overall, price pressure remains benign, but the more important issue for monetary policy will be the growth trajectory”, noted ANZ in a research report.
Recent economic data released have come in mixed. Industrial production and export data were subdued in October; however, private consumption and tourist arrivals improved.
“We think the Band of Thailand will keep its policy rate at 1.25 percent through 2020 unless growth fails to pick up”, added ANZ.
