Thailand's price growth broke a four month cooling streak. Commerce Ministry figures show headline inflation at 2.53% in August versus 1.95% in July, topping the 2.43% median from Bloomberg's economist survey while staying within the Bank of Thailand's 1% to 3% range. Month to month, the CPI rose 0.56% after July's 0.73% drop, beating the 0.51% estimate. Core inflation nudged up to 1.44% from 1.34%.
With prices still inside the target band, the Bank of Thailand kept its key rate unchanged at 1% for the third consecutive meeting in August. Governor Vitai Ratanakorn said last week that softer growth is the economy's bigger threat right now and that policy remains accommodative. A single hotter print, in other words, is not the story the central bank is watching most closely.
According to Nantapong Chiralerspong, director-general of the Commerce Ministry's Trade Policy and Strategy Office, price gains could keep quickening in September, driven by higher costs for oil, food and transportation. For 2024, the ministry projects average inflation in a 1.5% to 2.5% range, and sees the pace speeding up to roughly 2.7% in the fourth quarter. "High oil prices amid Middle East tensions and El Nino, which is expected to intensify, will be key drivers of inflation late this year," he said.
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If you live or spend in Thailand, everyday costs are creeping higher again, but policy is still tuned to support growth. Keep an eye on fuel and food into year end, since that is where the pressure is building most.
