2015 inflation forecast cut to 0.6-1.3%
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THE COMMERCE Ministry has cut its inflation target for this year to 0.6-1.3 per cent, much lower than the previous projection of 1.8-2.5 per cent, after the drop in oil prices and sluggish economic growth.
The ministry reported that the Consumer Price Index for February fell 0.52 per cent year on year, declining for the second consecutive month. Month-on-month inflation was only 0.12 per cent. The CPI for the January-February period was down 0.47 per cent from the first two months of 2014.
“Inflation could be lower than expected this year since oil prices are much lower in the world market,” Somkiat Triratpan, inspector-general of the ministry and director of its Policies and Trade Strategies Bureau, said yesterday, as Commerce announced the revised forecast of 0.6-1.3 per cent. Despite much lower inflation, Thailand is not yet in a deflationary situation. Many other countries are also experiencing low inflation rates due to slow economic growth, he said.
Although global oil prices have started to bounce back, they will likely remain lower than last year. The ministry expects the average Dubai oil price this year to be US$50-$60 per barrel, while the exchange rate will be Bt32-Bt35 against the US dollar and gross domestic product will grow by 3-4 per cent, down from the previous projection of 3.5-4.5 per cent.
The ministry foresees that Thailand’s CPI will decline by 0.4 per cent in the first quarter of this year.
Thai inflation in January was the second lowest in Asia after Taiwan, which was negative-0.94 per cent. Singapore’s CPI dropped by 0.4 per cent, China’s expanded by 0.8 per cent, Vietnam’s grew slightly at 0.94 per cent, Malaysia’s rose by 1.1 per cent, Laos’ grew by 2.04 per cent, and the Philippines’ was up by 2.4 per cent. India saw 5.1-per-cent inflation, and Indonesia 6.9 per cent.
In February, core inflation, which excluded volatile fuel and food prices, was 1.45 per cent year on year and 0.09 per cent month on month. Core inflation in the first two months was 1.55 per cent year on year.
Out of the ministry’s inflation basket of 450 items, prices increased for 165 items, including rice, flour, cooking oil, taxis, fast food and cooked food, while 181 remained unchanged and 101, including electricity, decreased from the previous month.
