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20 Dec 2018

Thai Economy

2019 inflation will likely slow to 0.8% Shaped by weather conditions, energy and utility prices (Business Brief No.3778)

        KResearch maintains our estimate of Headline Inflation in 2018 at 1.1 percent, compared to the 0.7-percent pace of 2017, as a result of rising energy prices and housing rents amid contracting prices of fresh food following a large quantity of supplies in the market.

      Thailand's Headline Inflation in 2019 is estimated at 0.8 percent (within a projection range of 0.5-1.2 percent), slowing from 2018, due to  falling energy prices that have more weight in the overall inflation rate than higher prices of fresh food and utilities.

         Looking ahead, in addition to the cyclical factors that affect Thailand's inflation, structural factors will also cause Thai and global inflation rates to move at low levels. Such structural factors include the emergence of an aging society wherein household consumption decreases and saving increases, the proliferation of e-commerce that helps reduce production costs while intensifying the price competition, thus inhibiting proprietors of physical stores from raising their prices easily.