Thailand: March inflation beats forecast, still at 13-year high

Headline consumer price index (CPI) jumped by a higher-than-expected 5.73% in March from a year earlier, the fastest pace in 13 years, driven by stronger prices of goods and energy, the Commerce Ministry said on Tuesday.

That compared with a forecast for a rise of 5.60% in a Reuters poll and followed February’s 5.28% increase, breaching the top end of the Bank of Thailand’s target range of 1% to 3% for a third straight month.

The ministry raised its forecast for headline inflation to 4% to 5% this year from a previous estimate of 0.7% to 2.4%, Ronnarong Phoolpipat, director-general of the Trade Policy and Strategy Office, told a news conference. In 2008, inflation was 5.5%.

Government measures including price controls on essential goods, a cap on fuel prices and subsidies would help slow a rise in inflation, he said.

“Policymakers viewed that the current high inflation must be closely monitored, but it’s not so worrying that further measures would be needed,” Mr Ronnarong said.

The central bank last week raised its 2022 headline inflation outlook to 4.9% from a previous forecast of 1.7%, noting supply-driven inflation should be temporary.

In March, the core CPI index, which strips out volatile fresh food and energy prices, was up 2% from a year earlier, also beating a forecast for a 1.80% rise.

In the January-March period, headline inflation was 4.75%, with the core rate at 1.43%.