INFLATION
Inflation hit five-year low but no deflation likely
Consumer prices hit a 64-month-low last month due to declining oil and food prices, but authorities still insist Thailand has yet to see signs of deflation. Economists also forecast negative inflation will be seen through the first half of this year but have ruled out deflation.
Deflation means that prices of goods and services have fallen for six months in a row. The current fall in prices stems largely from lower production costs falling in line with falling oil prices, not from a lack of production and consumption. Food inflation also remains in positive territory.
January's headline inflation, reported yesterday and based on 450 products and services, shrank by 0.41% year-on-year. It was the first contraction in more than five years, since September 2009, and due to a fall of 1.86% in non-food prices, particularly transport and communications. However, food and beverage prices still managed to edge up 2.34% year-on-year, driven mainly by meat, poultry and fish, seasonings and condiments, non-alcoholic beverages and prepared foods.