Thai inflation rates slow in September, but the central bank is expected to increase its rate
BANGKOK Thailand’s inflation rate was lower than anticipated in September, and it slowed by a quarter from September, figures revealed on Wednesday. However, high consumer prices boosted the likelihood of a second rate increase in November.
The Consumer Price Index (CPI) was up 6.41 percent in September, compared to the previous month, aided by lower energy costs as well as the low base from last year in August, but down from the 7.86 percent increase that was the 14th highest level in the last 14 years according to Commerce Ministry statistics.
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The figure is compared with the forecast increase of 6.60 percent according to an Reuters poll, and also the central bank’s goal range of 1%-3 percentage points for headline inflation.
The main CPI index that excludes fresh food and energy costs it was higher by 3.12 percent in September compared to the previous month, which is lower than the forecast increase of 3.20 percent. It was also higher than August’s 3.15 percentage increase.
The rate of inflation could fall even more during the fourth quarter of this year, due in part to the government’s support measures for food and energy prices The ministry stated.
It is forecasting the inflation of headlines to be between 5.5 percentage and 6.5 percent this year.
Graphic: Thailand’s sharp headline CPI plunge https://graphics.reuters.com/THAILAND-ECONOMY/INFLATION/byprjzmzxpe/chart.png
The Bank of Thailand will adopt an approach that is gradual and controlled to bring inflation back within the target, as per the Governor Sethaput Suthiwartnarueput.
This week it was reported that The Bank of Thailand raised its main interest rate by one quarter-point to 1.00 percent in order to limit inflation. The Bank of Thailand will look at the rate on Nov. 30 when the majority of economists anticipate a second gradual hike.
The BOT forecasts a headline inflation rate of 6.3 percent this year, and then dropping to 2.6 percent next year. The BOT forecasts the core rate to be 2.6 percent this year, and 2.4 percentage in the next year.
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From January to September in the period, headline inflation was 6.17 percent, while it was a core inflation rate of 2.26%.
