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Surging Inflation Catches Bank of Thailand by Surprise

Retail Prices Shopping Supermarket Store Stale Discounts Inflation

The Bank of Thailand informed the finance minister that inflation exceeded its expected level but should return to its normal pace late this year.

BoT Gov. Sethaput Suthiwartnarueput sent an open letter on the high inflation to the finance minister. The letter dated April 8 read that the average headline inflation would be above the 1%-3% range that the Monetary Policy Committee and the finance minister had jointly set on Nov. 16 for 2022 and a medium term.

On March 30, the MPC predicted that the headline inflation in the next 12 months would run at 4.1%, exceeding the earlier set range.

The committee attributed the high inflation mainly to cost-push shocks while the demand-pull inflation remained low because domestic purchasing power was not quite strong as the economy had yet to fully recover and Covid-19 was causing uncertainties.