Thai Central Bank to Raise Inflation Forecast following a Higher-than-Expected CPI in January

The Bank of Thailand is considering raising its inflation forecast this year after the headline inflation rose to a nine-month high of 3.23 percent in January 2022.

BOT stated on Friday that the main inflation rate is projected to be higher than the bank’s prediction of 1.7 percent this year. The target inflation rate for the first half of 2022 is between 1-3 percent, before declining in the second half.

Thailand’s Consumer Price Index (CPI), the most well-known indicator of inflation, hit a nine-month high in January 2022, exceeding market expectations due to rising energy and meat prices. In a breakdown, the Ministry of Commerce reported that meat prices rose 22.72 percent year-on-year, while energy prices rose 19.22 percent.

Looking ahead, the central bank expects that inflation will begin to decline once semiconductor and container shortages, as well as the swine outbreak, have subsided. Furthermore, the recent recovery in purchasing power also resulted in relatively low demand-side inflation pressures.