Thailand’s inflation hits 14-month high
Thailand’s consumer-price index continued an upward trend in May to reach its highest level in 14 months. Inflation rose 2.62 per cent in May, compared with 2.45 per cent in the preceding month, driven up by higher food and energy prices, Commerce Ministry data showed on June 2.
Core inflation, which excludes volatile energy prices, hit a 17-month high after increasing 1.75 per cent from a year ago – also higher than 1.66 per cent rise in April. The figure remains within the target range of 0.5 to 3 per cent set by the Bank of Thailand.
Nearly seven months of political turmoil in Thailand took a turn on May 22 when army chief Gen. Prayuth Chan-ocha staged a coup and set up a new governing body, the National Council for Peace and Order, to administer the country. The move followed months of protests aimed at ousting former Prime Minister Yingluck Shinawatra, who was removed by a court order in early May, accused of abuse of power.
During the first five months of this year, Thailand’s inflation rose 2.21 per cent while core inflation was up 1.4 per cent. While analysts believe Thailand’s CPI will likely stay elevated, some believe the upward trend may still be capped.
It is unlikely the sluggish economic conditions will warrant another interest rate cut by the central bank to boost the economy just yet, analysts said.
ANZ Research said it sees no need for the Bank of Thailand to further ease monetary policy in order to pick up the fiscal slack “with the junta placing the economy on the front burner.”
The central bank has cut its benchmark interest rate twice, a total of 0.5 percentage point, since the escalation of the political tensions in November. The rate now stands at 2%. The next monetary policy meeting is set for June 18.
The Commerce Ministry expects the country’s inflation to average 2.25 per cent in the first half of 2014 and 2.4 to 2.6 per cent in the second half. For the whole of 2014, the inflation target remains at 2.8 per cent.
Moody’s Investors Service affirmed Thailand’s long-term issuer ratings at Baa1 on June 2 with a stable outlook, citing the country’s strong fundamental credit.
Thailand's consumer-price index continued an upward trend in May to reach its highest level in 14 months. Inflation rose 2.62 per cent in May, compared with 2.45 per cent in the preceding month, driven up by higher food and energy prices, Commerce Ministry data showed on June 2. Core inflation, which excludes volatile energy prices, hit a 17-month high after increasing 1.75 per cent from a year ago - also higher than 1.66 per cent rise in April. The figure remains within the target range of 0.5 to 3 per cent set by the Bank of Thailand. Nearly seven months...
Thailand’s consumer-price index continued an upward trend in May to reach its highest level in 14 months. Inflation rose 2.62 per cent in May, compared with 2.45 per cent in the preceding month, driven up by higher food and energy prices, Commerce Ministry data showed on June 2.
Core inflation, which excludes volatile energy prices, hit a 17-month high after increasing 1.75 per cent from a year ago – also higher than 1.66 per cent rise in April. The figure remains within the target range of 0.5 to 3 per cent set by the Bank of Thailand.
Nearly seven months of political turmoil in Thailand took a turn on May 22 when army chief Gen. Prayuth Chan-ocha staged a coup and set up a new governing body, the National Council for Peace and Order, to administer the country. The move followed months of protests aimed at ousting former Prime Minister Yingluck Shinawatra, who was removed by a court order in early May, accused of abuse of power.
During the first five months of this year, Thailand’s inflation rose 2.21 per cent while core inflation was up 1.4 per cent. While analysts believe Thailand’s CPI will likely stay elevated, some believe the upward trend may still be capped.
It is unlikely the sluggish economic conditions will warrant another interest rate cut by the central bank to boost the economy just yet, analysts said.
ANZ Research said it sees no need for the Bank of Thailand to further ease monetary policy in order to pick up the fiscal slack “with the junta placing the economy on the front burner.”
The central bank has cut its benchmark interest rate twice, a total of 0.5 percentage point, since the escalation of the political tensions in November. The rate now stands at 2%. The next monetary policy meeting is set for June 18.
The Commerce Ministry expects the country’s inflation to average 2.25 per cent in the first half of 2014 and 2.4 to 2.6 per cent in the second half. For the whole of 2014, the inflation target remains at 2.8 per cent.
Moody’s Investors Service affirmed Thailand’s long-term issuer ratings at Baa1 on June 2 with a stable outlook, citing the country’s strong fundamental credit.
