Thai headline CPI meets forecast in August, may have peaked

THAILAND’S headline inflation rate in August rose slightly from the previous month to a 14-year high, in line with forecast and reinforcing expectations of a further interest rate hike later this month.

The headline consumer price index (CPI) rose 7.86 per cent in August from a year earlier, driven by energy prices and last year’s low base, commerce ministry data showed on Monday (Sep 5). That compared with a forecast rise of 7.85 per cent in a Reuters poll.

The pace, the fastest since July 2008, picked up from July’s 7.61 per cent rise and was far above the central bank’s target range of 1 per cent to 3 per cent. Economists expect a further interest rate hike at the central bank’s next meeting on Sep 28.

The inflation rate, however, may have peaked in August, ministry official Ronnarong Phoolpipat told a news conference.

“Inflation stayed at 7 per cent levels for 3 months in a row, suggesting it has peaked and will come down if the price situation continues like this,” he said.

The ministry sees inflation at around 5 per cent in the fourth quarter and a range of 5.5 per cent to 6.5 per cent in the whole of 2022, he said.

Government support measures, including an energy subsidy, and some price management have helped slow the rise of inflation, he said.

In August, the core CPI index, which strips out energy and fresh food prices, rose 3.15 per cent from a year earlier, lower than a forecast 3.20 per cent rise, but faster than July’s 2.99 per cent.

In the January-August period, headline inflation was 6.14 per cent and the core rate was 2.16 per cent. REUTERS