Thailand's inflation eased to 3.4%

Government unlikely to cut rates.

According to Nomura, Thailand's CPI inflation eased to 3.4% y-o-y from 3.6% in December (Consensus: 3.5%; Nomura: 3.4%). Higher food inflation (4.3% y-o-y in January from 4.0% in December) was offset by lower non-food inflation (2.8% from 3.4%).

Here's more:

The pickup in food prices was led by higher meat, poultry and fish, rice and egg and milk prices, while vegetable and fruit prices was still up on the year, but eased from the previous month due to the impact of cold weather, according to the Ministry of Commerce.

With core inflation showing sustained stability, remaining within Bank of Thailand‟s 0.5-3.0% target, we reiterate our 2013 CPI inflation forecast of 3.2%. Note also that the Ministry of Commerce rebased the CPI series to 2011 from 2007, which will create a small downward bias to our previous core inflation forecast.

We believe the Bank of Thailand (BOT) will remain on hold at its meeting on 20 February and for the rest of the year. We do not think the MPC will cut rates in light of still-strong private credit growth (14.2% y-o-y versus 15.9%; it was up by 1.1% m-o-m – the 35th consecutive monthly increase) and domestic demand.

In addition, despite softer CPI, 12-month ahead inflation expectationsdid not drop, have remained at 3.6% for the last four months.

Longer term, with domestic demand bolstered by fiscal stimulus, we expect GDP to remain solid this year. But with core inflation remaining within the target range and emerging pressures on the BOT to contain THB appreciation, rate hikes remainunlikely.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia