Thai inflation rate slows in September, central bank seen hiking further

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By Orathai Sriring and Kitiphong Thaichareon

BANGKOK (Reuters) – Thailand’s headline inflation rate was less than expected in September, decelerating from the previous month, data showed on Wednesday, but above-target consumer prices reinforced expectations of a further interest rate hike in November.

The headline consumer price index (CPI) rose 6.41% in September from a year earlier, helped by easing energy prices and last year’s low base, and down from August’s 7.86% increase, which was a 14-year high, according to commerce ministry data.

The reading compared with a forecast rise of 6.60% in a Reuters poll, and the central bank’s target range of 1% to 3% for headline inflation.

The core CPI index, which strips out energy and fresh food prices, was up 3.12% in September from a year ago, also less than a forecast rise of 3.20%, and followed August’s 3.15% rise.

Inflation may fall further in the fourth quarter of this year due mainly due to government support measures for energy and food prices, the ministry said.

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It forecast headline inflation to average between 5.5% and 6.5% this year.

Graphic: Thailand’s sharp headline CPI plunge

The Bank of Thailand will adopt a gradual and measured approach to bring inflation back to target, according to Governor Sethaput Suthiwartnarueput.

Last week, the Bank of Thailand raised its key interest rate by a quarter point to 1.00% to contain inflation. It will next review the rate on Nov. 30, when most economists expect a further, gradual hike.

The BOT predicts average headline inflation of 6.3% this year before falling to 2.6% next year. It forecasts the core rate at 2.6% this year and 2.4% next year.

In the January-September period, headline inflation was 6.17% and the core rate was 2.26%.

(Reporting by Orathai Sriring, Kitiphong Thaichareon, Satawasin Staporncharnchai; Editing by Kanupriya Kapoor)