Thai February Inflation Slows a Second Month as Food Prices Fell
Thailand’s inflation slowed for a second straight month in February, helped by state subsidies and a stronger baht, and as food prices fell.
Consumer prices rose 3.23 percent from a year earlier, the Ministry of Commerce said in Nonthaburi province outside Bangkok today, from a previously reported 3.39 percent increase in January. The median estimate of 17 economists in a Bloomberg News survey was 3.3 percent.
The Bank of Thailand last month held interest rates for a third straight meeting after the economy grew faster than estimated last quarter. The monetary authority has resisted the government’s calls for lower borrowing costs to curb capital inflows that boosted the baht to a 17-month high in January.
“Inflation is not worrisome, as the government continues to extend subsidies,” Phacharaphot Nuntramas, an economist at Siam Commercial Bank Pcl in Bangkok, said before the data release. “We expect the central bank to hold the rate throughout the year as risks to growth have receded.”
The baht rose 0.1 percent to 29.74 against the dollar at 11:08 a.m. in Bangkok. It is the biggest gainer this year among 11 widely-traded Asian currencies tracked by Bloomberg.
Prime Minister Yingluck Shinawatra said last month the price of cooking gas for household users will remain fixed till end-March, and also extended a tax cut on diesel. A new round of minimum-wage increases this year is unlikely to raise price pressure, the central bank has said.
“Inflation is at an appropriate level and it’s quite stable,” Permanent Secretary for Commerce Vatchari Vimooktayon said at a briefing today. “Price pressure is not high because of the government’s policy to control product prices and energy.”
Prices gained 0.21 percent in February from a month earlier, today’s report showed. Core inflation, which excludes fresh food and fuel costs, was 1.57 percent last month. The central bank uses the measure to guide policy and expects price gains will stay below its target of 3 percent this year.