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1 Nov 2013

Thai Economy

October Inflation: Up First Time in 2013 (Business Brief No.3462 Full Ed.)

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October Headline Inflation stood at 1.46 percent YoY, rising for the first time in 10 months over the 1.42 percent YoY in September. October Core Inflation came in at 0.71 percent YoY, increasing over the 0.61 percent YoY in September. When compared to September, the October Consumer Price Index (CPI) grew to a five-month high of 0.17 percent, driven by a 0.61 percent MoM increase in food and beverage prices, especially fresh food because of the “Kin Jae” festival and flooding in many parts of Thailand.
Over the remainder of 2013, we at KResearch expect that lackluster domestic economic activity will inhibit further cost transfers to consumer product prices. We have also assessed that inflation over the final two months of the year will likely remain below 2.0 percent. As a result, Headline Inflation for the entirety of 2013 will likely be at the lower end of our forecast range at perhaps 2.1-2.5 percent, while Core Inflation would likely average 1.0 percent, based on our base case forecast.

As for the 2014 outlook, we expect that a gradual recovery foreseen for the Thai economy, in line with greater stability that is becoming evident in the global economy, would raise inflation to a range of 2.4-3.2 percent on rising production costs.

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Thai Economy