Thailand: Inflation and Monetary Policy
Inflation in Thailand rose to 1.05% y/y in January 2020. This is the third month in a row, in which the rate accelerates after it bottomed out at 0.11% in October 2019.
Moreover, the indicator is now back within the target range of 1%-3% set by the central bank effectively in 2020. The rise in inflation was mainly due to higher prices of fresh foods (3.45% y/y) and energy (1.54% y/y).
The Bank of Thailand’s Monetary Policy Committee (MPC) unanimously lowered the benchmark interest rate by 25 basis points from 1.25% to 1.00% on its meeting on February 5, 2020.
The decision reflects the expected slower economic growth in 2020 mainly due to the impact of the coronavirus outbreak, as well as because of the delayed passing of the national budget and the severe drought.
According to the central bank’s statement, the committee would keep monitoring the economic growth, inflation, and financial stability, as well as the related risks, in order to determine the monetary policy in the future.
The entire overview of the key indicators, as well as comprehensive databank, can be found in the CEIC