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Inflation Falls Further Below Target & Suggests Rate Pause

THAILAND

Thailand CPI inflation for September printed lower than expected as it heads towards zero. Headline CPI eased to 0.3% y/y from 0.9% in August and core to 0.6% from 0.8%, the lowest since January 2022, and both well below the Bank of Thailand’s 1-3% target. These extremely low inflation prints are likely to confirm the signal from the BoT at its September meeting that it is ready to pause. USDTHB is off Wednesday high of 37.24 and is currently around 36.88. It fell on the weaker CPI data to 36.85.

  • The ministry of commerce has cut its 2023 forecast moderately to 1-1.7% from 1-2% and it has said that there could be deflation in Q4.
  • The cut in diesel and electricity taxes put downward pressure on inflation and should help to keep inflation low going forward.
  • Food prices fell 0.1% y/y despite an increase in rice to 4.6% y/y from 2.5%. September global processed rice prices rose 7.1% m/m. Fruit & vegetable inflation was 0.5% y/y down from 5.9% and most of the other components were also lower.
  • Non-food inflation eased to 0.6% from 1% in August driven by housing. Transportation rose though to 1.7% y/y from 0.3%.
Thailand CPI y/y%

Source: MNI - Market News/Refinitiv

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