Inflation eases in December
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The Thai consumer price index in December eased, showing an increase of only 3.53 per cent year on year, according to the Commerce Ministry.
Compared to the same period last year, inflation was higher due mainly to higher food prices.
Yet, compared to November when floodwaters were still high and food prices peaked, it was down by 0.48 per cent.
The full-year inflation for 2011 was up by 3.81 per cent, which was within the ministry's forecast range of 3.23.8 per cent, Permanent Secretary Yanyong Phuangrach said.
He is confident that inflation will remain in the in the range of 3.33.8 per cent this year.
“Inflation this year will be driven by increases in commodity prices, consumer spending and stable economic growth,” he said.
According to DBS Research, the impact of shortages on demand and prices would be felt more acutely in December and January as stocks are run down. Accordingly, inflation could be on the upside relative to market expectations.
“We presently do not envisage a series of interest rate cuts by the central bank,” it said in a research note.
The house expects only one 25-basis points rate cut this year as the central bank is expected to balance the impacts from price risks and the eurozone crisis.
