2 biggest reasons why Thailand's inflation has stayed benign

May inflation pegged to hit 2.5%.

According to DBS, May inflation data is due today and a benign print of 2.5% YoY is expected. Price pressures have been muted over the past few quarters. In level terms, prices in April were only 0.6% higher than in December, implying an annualized inflation rate of just over 1.8%.

DBS noted that the loss of economic growth momentum in 1Q coupled with THB strength are two reasons why inflation has stayed benign despite rising wage pressures.

Here's more:

With slowing GDP growth and low inflation,the central bank opted to reduce the policy rate forthe firsttime since October by 25bpsto 2.50% atthe previous monetary policy meeting on May 29.

We suspect that the policy rate decision is one off and not the start of an easing cycle as BoT maintains vigilance on the build up of asset prices. For the rest of this year, a mild updrift is likely asthe government steps up on public infrastructure spending, which should lead to some demand-pull inflation.

However, the upward trajectory would not be sufficient for the BoT to tighten monetary policy forthe rest of 2013.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia