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Thailand’s Inflation Accelerates in April

A gold shop clerk changes signs indicating the market price for gold at a shop in the Thai capital

A gold shop clerk changes signs indicating the market price for gold at a shop in the Thai capital

BANGKOK—Thailand’s inflation accelerated in April, likely giving the country’s central bank less room to use interest rates to jump-start the economy.

Thailand’s consumer price index rose 2.45% in April to a 13-month high, up from 2.11% in March, due to food and energy prices, the Commerce Ministry said Thursday.

Core CPI, which excludes volatile energy and food prices, rose 1.66% from a year earlier, up from 1.31% in March, the ministry said.

Both figures exceeded the estimates of economists polled by The Wall Street Journal, whose median forecast for April CPI was 2.2% and for core CPI was 1.4%.

Core inflation fell within the Bank of Thailand’s target range of 0.5% to 3.0%.

Inflation is expected to rise 2.4% in the second quarter, said Amparwon Pichalai, an adviser to the Commerce Ministry. Drought in some areas could result in shortages of agricultural products, pushing food prices higher, she said.

Higher prices for cooking gas, which have been rising since September, had pushed the prices of processed foods higher, Ms. Amparwon said. Higher electricity rates and a weaker baht would also contribute to inflation, she said.

The ministry projected that overall inflation in the first six months this year would be 2.2%, Ms. Amparwon said.

Usara Wilaipich, senior economist at Standard Chartered Bank, said rising inflationary pressures would limit the central bank’s scope for cutting interest rates. The Bank of Thailand kept its policy rate unchanged at 2% in April despite a weakening economy.

The country’s economy likely contracted in the first quarter, the Finance Ministry said Tuesday. The official figure is due to be released later this month. By Warangkana Chomchuen

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Posted by on May 1 2014. Filed under Economy & Business. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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