IR.april2011 - No 13/2011 Inflation Report April 2011 Mr...

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No. 13/2011 Inflation Report April 2011 Mr. Paiboon Kittisrikangwan, Assistant Governor, Bank of Thailand (BOT), announced that the Monetary Policy Committee (MPC) released the April 2011 issue of the Inflation Report on 28 April 2011. The Report was published to enhance public understanding of the BOT’s policy stance, with the key details summarized as follows. Recent developments in inflation and economic conditions The Thai economy expanded robustly by 7.8 percent in 2010, on the back of strong export momentum underpinned by the global economic recovery and rising contribution of private-sector demand. In addition, businesses also accumulated inventories to make up for destocking during the preceding year’s global crisis. Growth rebounded into positive territory in 2010 Q4 after recording negative for two consecutive quarters. This owes mainly to a pick-up in exports driven by trading partners’ demand, combined with a comeback in consumer spending thanks to rising farm income, healthy employment, and low interest rates. Private investment, however, subsided from the previous quarter due to the flood’s impacts. Inflation pressures continued to build up in 2011 Q1. Headline readings edged up in line with: (1) soaring fresh food prices, as global supply was constrained by natural disasters; and (2) up-trending energy prices, which followed a marked acceleration in global oil prices due to both global demand growth and political unrests in the Middle East and North Africa. Barring the effects of volatile fresh food and oil prices, core inflation still ticked up in tandem with prices of prepared food and construction materials. Economic growth and inflation projections In forming economic and inflation forecasts for the next eight quarters, the MPC revises the key assumptions from those used three months earlier as follows: 1. Demand for Thai exports is revised up slightly throughout the projection period.
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IR.april2011 - No 13/2011 Inflation Report April 2011 Mr...

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