ASEAN KEY DESTINATIONS
Thai inflation accelerates
The index of consumer prices climbed 4.29 percent from a year earlier, compared with 4.08 percent in July, staying above 4 percent for the fifth month in a row.
Commerce Ministry permanent secretary Yanyong Phuangrach said the increase was driven mainly by rising food prices, which soared 8.43 percent year-on-year, with the price of glutinous rice increasing 6.90 percent, fresh fruit and vegetables 14.47 percent and finished food 17.25 percent.
Raw food and energy prices rose 7.99 percent from August of last year. On a monthly basis, consumer prices rose 0.43 percent from July.
The rate in the first eight months increased to 3.72 percent year-on-year, which Mr Yanyong described as within the scope of the Commerce Ministry's projected range of between 3.2% and 3.7 percent.
Core inflation, which strips out volatile food and energy prices, increased 2.85 percent year-on-year, with the monthly rate rising 0.275 percent and the eight-month rate up 2.12 percent.
According to Mr. Yanyong, the prices of several food items such as meat, vegetables and rice were likely to decline in the coming months, as new supply is about to enter the market.
Recent fuel price adjustments would also result in transport cost reductions and rein in inflation in the fourth quarter and for the full year. "The inflation rate in August has probably peaked," said Mr. Yanyong. "The rate from now on is expected to ease, with the figures in September expected to stand at not more than 4 percent and the entire fourth quarter at 3.6 percent. Inflation for the whole year as a consequence will stand at an average of 3.7 percent."
Barclays Capital, the investment banking division of Barclays Bank Plc, agreed, saying inflation had more than likely peaked, coming in at 4.3 percent year-on-year for August, compared with market expectations for 4.0 percent.
The recent decision to slash excise duties on petroleum products should push headline inflation significantly lower in September by as much as 50 basis points, Barclays estimates.
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