The Bank of Thailand (BoT) is expected to remain on hold throughout this year, while inflation data is unlikely to have any bearing on monetary policy, according to the latest report from ANZ Research.
The rebound in headline CPI in March was predominantly driven by higher energy prices. Price changes in other major categories of the CPI basket were muted and remained in recent ranges. Core inflation also remained broadly stable as a result.
On a sequential basis, headline CPI rose by 0.41 percent m/m in March, following a 0.24 percent m/m increase in the previous month. The acceleration was driven by higher prices of energy which gained 2.85 percent m/m after rising 1.67 percent m/m in February.
Raw food prices increased by 0.44 percent m/m although the annual reading was higher at 3.75 percent y/y owing to a low base. Price pressures in other categories including clothing, housing and recreation and education remained muted both on a sequential and annual basis. As a consequence, core inflation remained benign at 0.58 percent y/y.
"Risks to financial stability remain but for now, the focus of monetary policy is likely to be on supporting growth which has suffered from weak exports," ANZ Research further commented in the report.


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