Thailand’s CPI inflation comes in positive territory in April, rate may reach 2 pct by 2016-end

Thailand’s CPI inflation for April returned to positive territory after remaining in negative zone for 15 straight months. CPI inflation reached 0.1% in April. Inflation is likely to accelerate higher in the future, partially due to low base effects, according to DBS Bank. By mid-2016, CPI inflation is expected to reach 1.5% and around 2% by the end of 2016, added DBS Bank. An expected drop in food crop supply might also add pressure on food prices.

The acceleration in inflation is upbeat for the Bank of Thailand. The central bank has kept a target of 2.5%-3.5% inflation range for the medium term. With the current scenario, the target rate might be attained only by mid-2017, barring oil price shock, noted DBS Bank.

Thailand’s core inflation continues to be weak. It continues to trend lower than 1% and is accelerating at a slower rate than the headline inflation rate. Unless the underlying demand grows considerably, core inflation is likely to be below 1.5% at the end of 2016, said DBS Bank.