Thailand's headline consumer price index (CPI) rose by 0.61% in September compared to the same period last year, following a 0.35% increase in August. This information was reported by the nation's Ministry of Commerce. The core inflation rate, which excludes volatile categories like food and energy prices, also saw a rise of 0.77% in September year-on-year.
However, month-to-month consumer prices experienced a decline of 0.10% from August to September. Government officials are advocating for the central bank to implement looser monetary policies, particularly as inflation levels remain well below the central bank's targeted inflation band of 1% to 3%.
Furthermore, Thailand's economic growth rates currently lag behind those of its regional counterparts, raising concerns among policymakers. To address these economic challenges, the nation's Finance Ministry has proposed an adjustment to the central bank's inflation target for 2025, suggesting a new range of 1.5% to 3.5%.
This adjustment would aim to provide the Bank of Thailand with greater flexibility to lower interest rates effectively. Adding to the pressures on the Bank of Thailand, the country's currency, the baht, has been experiencing appreciation in foreign exchange markets. This situation threatens exports and diminishes Thailand's appeal as a tourist destination, which could further impact the economy.
As of Monday, the baht traded at nearly 33 to the US dollar, a significant shift from approximately 37 to the dollar in April, marking an approximate appreciation of 11%. In late September, the Bank of Thailand assured reporters that it was diligently monitoring the baht's strengthening and was ready to take action if deemed necessary.
Additionally, forecasts from Thailand's National Economic and Social Development Council predict that the economy will grow within a range of 2.3% to 2.8% in 2024. Critics have pointed out that other ASEAN nations, including the Philippines, Indonesia, and Malaysia, are projecting GDP growth rates exceeding 5% in 2024, underscoring the competitive economic pressures on Thailand..