Year's inflation target jointly set at 0.5-3%
Play
The Finance Ministry and the Bank of Thailand (BOT) have agreed to set a target range for core inflation of 0.5 to 3 per cent this year, the Fiscal Policy Office said yesterday.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong and BOT Governor Prasarn Trairatvorakul agreed that the target would apply in every quarter of this year, the office said in a press release yesterday.
The Cabinet approved the target on Tuesday. The central bank had proposed setting a target for headline inflation instead of core inflation, believing it would be more easily understood by the public. Kittiratt, however, opposed the plan, fearing it would lead people to blame the government for high inflation.
The headline inflation rate is typically higher than the core inflation rate, which does not factor in fuel and fresh-food prices.
To achieve the target inflation range of 0.5 to 3 per cent, officials from the BOT and the ministry will meet every quarter to consult on monetary policy, the Fiscal Policy Office said.
If inflation exceeds the target range, the central bank’s Monetary Policy Committee will be required to explain the issue to the finance minister and draw up a plan to bring the rate back within range, the office said.
If the two sides agree that there is a good reason to change the inflation target range, they will report to the Cabinet, the office said.
