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THAILAND: CPI Inflation Picks Up But Remains Low, Expected To Exceed 1% in Q4

THAILAND
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Thai headline CPI in September came in below consensus at 0.6% y/y but picked up from 0.35%. Core was in line at 0.8% y/y, highest in just over a year, but also up on August’s 0.6%. Inflation remains very low driven by lacklustre growth as well as government subsidies and price caps. Bank of Thailand Governor Sethaput has said that the central bank remains “outlook dependent” and will adjust monetary policy if needed but doesn’t see signs of deflation.

  • Inflation is expected to pick up towards the end of the year with the government forecasting October to rise to 1.25%. The increase is due to higher oil prices and the impact of recent floods. 2024 inflation is forecast to be 0.2-0.8%.
  • The government continues to put pressure on BoT for a rate cut with finance minister Pichai saying today that “inflation is too low” and it is looking at whether higher inflation would support growth. It wants to discuss the inflation target with the BoT but Pichai wouldn’t comment on reports of a 1.5-3.5% corridor. The current band is 1-3%. 
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Thai headline CPI in September came in below consensus at 0.6% y/y but picked up from 0.35%. Core was in line at 0.8% y/y, highest in just over a year, but also up on August’s 0.6%. Inflation remains very low driven by lacklustre growth as well as government subsidies and price caps. Bank of Thailand Governor Sethaput has said that the central bank remains “outlook dependent” and will adjust monetary policy if needed but doesn’t see signs of deflation.

  • Inflation is expected to pick up towards the end of the year with the government forecasting October to rise to 1.25%. The increase is due to higher oil prices and the impact of recent floods. 2024 inflation is forecast to be 0.2-0.8%.
  • The government continues to put pressure on BoT for a rate cut with finance minister Pichai saying today that “inflation is too low” and it is looking at whether higher inflation would support growth. It wants to discuss the inflation target with the BoT but Pichai wouldn’t comment on reports of a 1.5-3.5% corridor. The current band is 1-3%.