, Thailand

Here's why Thailand's inflation will stand pat at above 3%

But analysts believe that inflation is not an urgent matter, as the government should focus on exports.

According to DBS, headline inflation has stayed below 3% YoY since April, but this is set to change. A 3.3% increase has been penciled in for September and inflation is likely to stay above 3% for the rest of this year.

Here's more from DBS:

Inflation is not an immediate problem, even though food prices are likely to remain challenging. Instead, the weakening export numbers will be a bigger focus for the central bank (BoT). At the last policy meeting, it was voted 3-2 for the policy rate to be kept on hold at 3%.

While not our core view, deteriorating trade numbers could prompt BoT to loosen monetary policy in 4Q. That said, domestic price pressures will start to surface in the medium term.

The government has taken a decisively pro-growth stance as exhibited by the rice pledging scheme, the car rebate scheme and longer-term flood-prevention projects. Coupled with the planned minimum wage hikes early next year, price.

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