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2 Apr 2014

Thai Economy

March Inflation Rate: Soaring Prices Pressure Consumption (Business Brief No.3492 Full Ed.)

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The March CPI inched up 0.22 percent MoM, led by a 0.45 percent increase in food and beverage prices, especially fresh foods (meat and fruit) as well as food-away-from-home. Likewise, non-food and beverage prices rose 0.10 percent MoM along with higher retail oil prices.
March's Headline Inflation rose to a nine-month high of 2.11 percent YoY, compared to 1.96 percent YoY in February. Meanwhile, Core Inflation had advanced for the sixth consecutive month to 1.31 percent YoY, the highest level in over a year, up from 1.22 percent YoY in February. This upward trend over recent months was in sharp contrast to declining private consumption since late last year.

Even though private consumption may remain sluggish for several months more, many items of consumer goods should see rising prices in line with soaring costs of raw materials. KResearch therefore holds the view that 2Q14 Headline Inflation may average 2.2 percent YoY, higher than the 2.0 percent seen during 1Q14. Broadly speaking, a tepid recovery in household consumption being seen right now has prompted KResearch to forecast that 2014 inflation will remain within our projection of 2.2-2.6 percent, despite the gradually rising inflationary pressure over the remainder of this year.

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Thai Economy