Economics
Thailand Inflation Spike May Tilt Odds in Favor of Early Rate Hikes
- End of diesel price freeze to feed through to retail inflation
- StanChart expects BOT to turn hawkish at its June 8 meeting
A market vendor waits for customers at a market in Bangkok on April 26.
Photographer: Luke Duggleby/BloombergThis article is for subscribers only.
Thailand’s retail inflation is poised to accelerate from a 13-year high with the government lifting a freeze on some retail fuel prices, boosting the odds for the central bank to pivot away from its pandemic-era monetary policy accommodation.
Retail diesel prices will increase from May 1 after efforts to subsidize the fuel ended up with the government accumulating almost $2 billion in debt. Two years of unprecedented economic stimulus to blunt the impact of the pandemic has left the administration with little fiscal room to maneuver.