Thailand Slips Into Deflation on Falling Energy Prices
Nopparat Chaichalearmmongkol
February 02, 2015
BANGKOK--Thailand entered deflation in January for the first time in more than five years due to falling energy prices.
The country's headline consumer-price index contracted 0.41% in January from a year ago, compared with a 0.6% rise in December, the commerce ministry said Monday. The headline CPI in January also fell 0.59% sequentially.
Thailand last fell into deflation in September 2009 amid falling oil prices and government measures to reduce living costs.
The ministry attributed the fall in January's inflation to lower retail fuel prices and electricity charges, as well as cheaper fresh-food products.
Economists polled by The Wall Street Journal had earlier forecasted a median 0.25% year-on-year fall and a 0.4% month- on-month drop in headline inflation.
Core inflation, which excludes volatile food and energy prices, rose 1.64% from the previous year and 0.16% sequentially, compared with median forecasts of a 1.58% year-on-year decrease and a 0.115% month-on-month increase.
"Although Thailand's headline inflation [entered] negative territory...it was due mainly to falling oil prices," said Usara Wilaipich, a senior economist at Standard Chartered Bank. She said core inflation, which reflects domestic demand, appeared to have risen, adding that lower headline inflation is positive for consumers' purchasing power.
The commerce ministry has maintained its 2015 inflation target of 1.8%-2.5%, based on assumptions of global crude-oil prices between $90-$110 a barrel, gross domestic product growth of 3.5%-4.5% and the baht trading at 32-35 against the U.S. dollar.
Somkiat Triratpan, director of the ministry's Trade Policy and Strategy Office, said the ministry would evaluate energy price movements before it considers any revision to the inflation target.
nasdaq.com
Nopparat Chaichalearmmongkol
February 02, 2015
BANGKOK--Thailand entered deflation in January for the first time in more than five years due to falling energy prices.
The country's headline consumer-price index contracted 0.41% in January from a year ago, compared with a 0.6% rise in December, the commerce ministry said Monday. The headline CPI in January also fell 0.59% sequentially.
Thailand last fell into deflation in September 2009 amid falling oil prices and government measures to reduce living costs.
The ministry attributed the fall in January's inflation to lower retail fuel prices and electricity charges, as well as cheaper fresh-food products.
Economists polled by The Wall Street Journal had earlier forecasted a median 0.25% year-on-year fall and a 0.4% month- on-month drop in headline inflation.
Core inflation, which excludes volatile food and energy prices, rose 1.64% from the previous year and 0.16% sequentially, compared with median forecasts of a 1.58% year-on-year decrease and a 0.115% month-on-month increase.
"Although Thailand's headline inflation [entered] negative territory...it was due mainly to falling oil prices," said Usara Wilaipich, a senior economist at Standard Chartered Bank. She said core inflation, which reflects domestic demand, appeared to have risen, adding that lower headline inflation is positive for consumers' purchasing power.
The commerce ministry has maintained its 2015 inflation target of 1.8%-2.5%, based on assumptions of global crude-oil prices between $90-$110 a barrel, gross domestic product growth of 3.5%-4.5% and the baht trading at 32-35 against the U.S. dollar.
Somkiat Triratpan, director of the ministry's Trade Policy and Strategy Office, said the ministry would evaluate energy price movements before it considers any revision to the inflation target.
nasdaq.com
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