Consumer prices in Thailand likely to rise in 2017; BoT to maintain steady policy stance

Consumer prices in Thailand are expected to rise during the course of next year, compared to projections of this year.

Thailand’s headline and core inflation are set to come in at 0.8and 1.0 percent respectively in November, DBS reported. Unless there is another dip in global oil prices, inflation is set to continue inching up in 2017.

As for Thailand, the Bank of Thailand (BoT) is likely to be rather sanguine with the current inflation trajectory. CPI inflation is set to average 1.9 percent in 2017, as compared to projected 0.3 percent this year. Indeed, the central bank may prefer inflation to rise at an even faster rate, especially if it is being driven by core inflation.

For the medium-term, the BOoT seems more comfortable with inflation returning to the 2.5-3.5 percent range. And at the current trend, this is likely to be seen only in early-2018, providing a lot of room for the BoT to keep its accommodative monetary policy stance intact.